Home buying tips
VA Loans: Requirements, Eligibility, & How To Use One
Apr. 3, 2025
9min read
If you or a loved one is a veteran or active-duty member of the U.S. armed forces, a VA loan could be a powerful tool in your homebuying journey. Backed by the Department of Veterans Affairs, VA loans can help you save significantly on down payments, closing costs, and even interest rates.
While the savings can be substantial, the eligibility rules and property requirements can feel overwhelming. That’s where Mortgage Marketplace comes in: we’re here to guide you through the process and help you take full advantage of your VA loan benefits on the way to your new home.
Quick Summary
A VA loan is a great way for an active duty member of the U.S. armed forces or a veteran to get a discounted mortgage.
VA Loans are partially backed by the Department of Veterans Affairs, allowing for lower rates and down payments.
Key requirements: the first step is to get written proof of service through a COE (certificate of eligibility) or written proof from a superior officer.
Tips: VA loans can only be used to finance a primary home, but can also be used to refinance a primary home’s mortgage.
What is a VA Loan?
VA home loans are used by eligible veterans and active duty members of the U.S. armed forces to get discounts on mortgage loans for eligible housing purchases. VA loans have several eligibility criteria set by the Department of Veterans Affairs that both the loan applicant and the home must meet.
The Department of Veterans Affairs backs VA loans, allowing for better interest rates and reduced down payments.
Enter your income and expenses to find out how much home you can afford with our free home affordability calculator.
- Tip: The VA usually backs up to 25% of the total value of the loan.
VA Loan Eligibility
Eligibility for VA loans is fairly straightforward for active duty service members, who are eligible if they have served for at least 90 consecutive days. Anyone who has served in the National Guard or reserve forces for at least six years is also eligible.
Military spouses can also access VA loans. Surviving spouses of service members who died while on active duty or from a disability caused by service are eligible. Surviving spouses can remain eligible even if they remarried, as long as it’s past the age of 57 and after December 16, 2003. Spouses of prisoners of war or service members missing in action are also eligible.
As for veterans, eligibility changes based on when you served, but it generally ranges between 90 and 180 days of active service, depending on dates. Check with the Department of Veterans Affairs to review your eligibility.
VA Loan Requirements
While the Department of Veterans Affairs requirements for VA loans are minimal, here are some typical VA mortgage lender requirements:
- No federal debt defaults
- Two years of employment history
- Maximum debt-to-income (DTI) ratio of 41%
The Department of Veterans Affairs has no credit score eligibility requirements for VA loans, but lenders may have them. Generally, if you have a credit score of at least 620, you’ll be eligible for most VA loans.
- Tip: If your credit score is lower, you may still be eligible for a VA loan if you pay a larger downpayment or a higher interest rate. Contact your lender for specific details.
Mortgage Marketplace can help you check your eligibility! Contact us today for the best VA loan rates and to review your options for your house purchase journey.
VA Loan Restrictions
In addition to complex eligibility requirements, VA loans also come with a few specific property restrictions, including:
Primary Residence
The home purchased must be your primary residence. This means you and your family must intend to live in the house after buying it with a VA home loan. These loans can’t cover a secondary home like an investment property or vacation home.
Good Property Condition
The VA sends an appraiser to review the home’s condition. The home must meet several conditions to qualify for a VA loan purchase, including:
- Safely operating mechanical systems that are projected to function properly in the near future
- Adequate heating utilities that are in good working order
- Roofing is in good condition with no major leaks
- No structural threats, such as termites or rot
If you wish to purchase a condo with a VA home loan, it must be approved on the Department of Veterans Affairs condo list.
- Tip: It’s generally best to avoid homes listed “as-is” if you intend to use a VA loan because these homes tend to have one or more of these issues.
VA Loan Limits
Per the VA, VA home loans don’t have a limit, as long as the applicant has their full entitlement. You’ll have full entitlement if you:
- Never used your home loan benefit
- Paid a previous VA mortgage loan in full and sold the property
- Used your home loan benefit, but had a foreclosure and repaid the loan in full
Though the VA has no limits for loans, private lenders do. Like any mortgage loan, an applicant’s credit history, debt-to-income ratio, and current assets are considered. While the VA pays up to 25% of the loan’s total value, you must demonstrate that you can comfortably cover the rest.
VA Loan Funding Fee
The VA funding fee is a one-time payment that VA loan users must make, intended to reduce the loan’s cost to taxpayers. When you close on your VA loan, you can pay the funding fee by rolling it into closing costs or pay it over time by adding it to the loan’s total cost. Check the VA funding fees page for more details.
- Tip: Service-disabled veterans or veterans later classified with disability related to military service can be exempt from VA loan funding fees.
Not sure which loan is best for you? Consider using our free loan comparison calculator and analyze different loan options side by side.
How To Apply For A VA Loan
The first step for a VA home loan is to obtain a certificate of eligibility (COE). The steps to request a VA loan COE differ between active-duty service members and veterans.
Veterans of active-duty service, National Guard, and reserves generally need to have their discharge papers. Active-duty service members need a statement of service signed by a commander or personnel officer, showing:
- Your name & Social Security number
- Your date of birth
- The starting date of your service
- The commanding officer’s name
- Tip: For more in-depth information on requesting a COE, check the VA’s website.
Acquiring a COE is the only major difference between a VA loan application and an average mortgage loan. They differ slightly farther along in the process, like the VA loan funding fee and the VA appraisal, but the process should largely be the same.
Other documents typically required for all home loans, including VA mortgage loans, include:
- Pay stubs from the last month
- Two years of W2s confirming historic earnings
- Two months of bank statements
- Explanations for large asset deposits, employment gaps, and credit issues
VA Mortgage Loan Options
A VA Loan can only be used to finance a primary home purchase, but you have several loan type options:
VA Purchase Loan
A VA purchase loan is just a standard mortgage loan, but with the down payment and interest rate benefits offered by VA loans..
Interest Rate Reduction Refinance VA Loan
If you previously purchased a home with a standard mortgage loan or want to take advantage of better market conditions, you can use a VA loan to refinance.
- Tip: Because VA home loans are backed by the Department of Veterans Affairs, you have access to significantly lower interest rates than typical mortgages.
Cash-Out Refinance VA Loan
Similar to a home equity loan or HELOC, a cash-out refinance loan involves taking a second, larger mortgage on your home. You can then use the lump sum difference for any desired purpose. A cash-out refinance VA loan takes advantage of the better interest and down payment rates available to veterans and service members, with all the benefits of accessing home equity.
VA Loan Requirements
A Native American Direct Loan allows a Native American service member or veteran to finance housing with a loan without a down payment. An NADL may have its own credit standards, separate from VA requirements.
- Tip: For more information, check the VA’s page on Native American Direct Loans.
Determine how much of a loan you can take out on your current home with our free home equity calculator.
VA Loan Pros & Cons
Pros
- Limited down payment
Down payments are limited thanks to the Department of Veterans Affairs’ backing. Some VA mortgage loans may involve no down payment. - No loan limit
The VA has no limit for the amount you can borrow with a VA home loan, though lenders may have limits based on credit score and history. - No minimum credit score
Similar to how the VA handles loan limits, the Department of Veterans Affairs specifies no minimum credit score. However, lenders may require a minimum credit score. You’ll qualify for most VA mortgage loans with a 620 credit score, though some lenders may accept a lower score. - No mortgage insurance
VA home loans never require personal mortgage insurance (PMI), which offers significant closing cost and monthly interest payment savings. - Lower closing costs
Portions of closing costs are paid by the Department of Veterans Affairs.
Cons
- Primary residence requirement
VA mortgage loans can only be used to purchase a primary residence and cannot be used on an investment or vacation property. - VA appraisal
The home must be approved by a VA appraiser and is generally expected to be a “conventional” home in good shape. Therefore, distressed or “fixer-upper” properties often cannot be purchased with a VA home loan. - VA funding fee
The VA funding fee, intended to lower the taxpayer burden on VA home loans, often adds a fee between 0.5% and 3.6% of the loan amount.
VA Loan Lenders
Not all mortgage loan lenders offer VA loans. Some who do only handle a few per year, so it’s important to find a lender with VA loan experience to ensure you get the best possible rates.
For help finding the right VA home loan, contact Mortgage Marketplace today or give us a call at (833-970-1560). As experts in the mortgage industry, we can connect you to the home loan that best fits your needs.
I appreciate the breakdown of closing costs—it’s something I hadn’t considered before. Great read!
Sammy P
Queens, NY
5/5
Great article! I didn’t realize how important it is to budget for maintenance and closing costs. Very helpful!
Jeremy M
Georgia, MD
5/5
This was super insightful! The tips on saving for a down payment cleared up a lot of confusion for me.
Tania N
Towns, CA
5/5
FAQ
How much can you borrow with a VA Loan?
+The Department of Veterans Affairs specifies no limit on VA home loans, but mortgage lenders may have their own requirements. Limits are typically based on credit history and employment history.
What is the minimum credit score required for a VA loan?
+VA home loans don’t have a specific minimum required credit score per VA guidelines, but home loan lenders may have their own requirements. It’s generally best to have a 620 credit score to access the best rates and mortgage loan options.
Can VA loans be used more than once?
+Eligible veterans and active duty service members can use VA mortgage loans multiple times, provided any previous loans are fully paid off and they still have loan entitlement.
Are VA loan rates lower than conventional loan rates?
+Because VA Loans are partially backed by the Department of Veterans affairs, interest rates are generally slightly lower than those of conventional mortgage loans.
What is a VA amendatory clause?
+A VA amendatory clause is an escape clause agreement signed by buyers and sellers before the VA appraisal is completed. Required for all VA mortgage loans, it is invoked if the VA appraisal comes in lower than the sale price. This allows the buyer to negotiate a lower price, cancel the purchase and have their deposit returned, or proceed with the purchase by making a down payment that covers the gap between the appraised value and the sale price.
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