Apply Now

VA Loans

A VA Home Loan is a mortgage loan established in 1944 by the United States Department of Veterans Affairs. It is available to Veterans, Active Duty Members, Reserve Members, National Guard members, and widowed military spouses. The VA sets qualifying standards, terms, and guarantees a portion of the loan, but private lenders issue the loans.

VA Loan Requirements

  • Valid Certificate of Eligibility (COE).
  • Satisfactory credit score (generally 620 or higher).
  • Debt-to-income ratio less than 60%.
  • Sufficient steady income to repay the loan.
  • Funds to cover the VA funding fee (may be waived for service-connected disabilities or qualifying surviving spouses).

Benefits of VA Loans

  • No down payment required up to VA loan limits.
  • Competitive and negotiable interest rates.
  • No private mortgage insurance (PMI) required.
  • No early payoff penalty.
  • Assumable mortgage.
  • Limited closing costs, may be paid by seller.
  • Available repeatedly, not restricted to first-time buyers.
  • Qualify even after bankruptcy or foreclosure (2–3 years).
  • Assistance available to avoid default.
  • Many states offer property tax reductions for veterans.

Drawbacks of VA Loans

  • No down payment can result in owing more than the market value if home prices drop.
  • VA funding fee (1.25%–3.3%) increases monthly payments and overall interest.
  • Only for primary residences; cannot purchase vacation or investment properties.
  • Cannot be used for certain property types like vacant land or co-ops.

Types of VA Loans

  • VA Home Purchase Loan: Purchase a new home; options include fixed-rate, ARM, and Jumbo loans.
  • VA Construction Loan: Build a home from scratch; converts to 30-year fixed mortgage after construction.
  • Interest Rate Reduction Refinance Loan (IRRRL): Streamline refinance of existing VA loan to lower payments or adjust term.
  • Efficient Mortgage (EEM): Add energy-efficient improvements to any VA loan.
  • Native American Direct Loan Program: Helps Native American veterans purchase, refinance, construct, or improve homes on federal trust land.
  • VA Cash-Out Refinance Loans: Borrow against home equity for debt payoff, improvements, or education expenses.
  • Adapted Housing Grants: Helps veterans with service-connected disabilities purchase or modify a home; includes SAH and SHA programs.

Expert Help

Contact Buy Low Rate Mortgage today to determine if a VA loan is right for you. Our experts will guide you through eligibility, application, and benefits.