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VA Loan Guide: Eligibility, Best Lenders and How to Apply

Updated on:
Content was accurate at the time of publication.

The VA home loan benefit is one of the most useful perks of being a military service member or veteran. It opens the door to VA loan programs that make it a lot easier to finance a home and get a great mortgage rate and loan terms. The VA loan process is a lot like getting a traditional mortgage, but there are key differences you’ll need to understand before deciding whether a VA loan is right for you.

A VA loan is a special type of mortgage created specifically to help veterans become homeowners. VA home loans have more lenient requirements than conventional loans.

Backed by the U.S. Department of Veterans Affairs (VA), VA loans are only available to qualified borrowers as a part of their military benefits. This generally includes active-duty service members and veterans, though spouses can qualify in some cases.

The VA requires you to live in any home you finance with a VA loan.

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Key takeaways about VA loans

 Affordable loans with no down payment, no minimum credit score requirement and no mortgage insurance.
Typically offer lower interest rates and closing costs.
Come with some unique fees and costs, including the VA funding fee and a VA home appraisal.

Right now, 30-year VA loan rates sit at 6.30%, while comparable conventional loan rates are 7.52%.

VA loan rates are generally lower than FHA loan rates and rates offered on conventional loans. However, since VA loans require a funding fee that conventional and FHA loans don’t, it’s a good idea to compare both APRs and interest rates when deciding between these loan types.

Current average rates are calculated using all conditional loan offers presented to consumers nationwide by LendingTree’s network partners on the previous day for each combination of loan type, loan program, and loan term. Rates and other loan terms are subject to lender approval and not guaranteed. Not all consumers may qualify. See LendingTree’s Terms of Use for more details.

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You can get a VA loan from traditional lenders, like banks and credit unions. The VA doesn’t issue VA loans — instead, it “backs” them, which means the agency pays lenders a certain amount of money if the loan goes into default. This reduces the risk lenders have to take on and allows them to give loans to borrowers who may not be able to qualify for a conventional loan.

Getting a VA loan is very similar to getting any other home loan: You have to apply and provide documentation of your income, assets and employment. Your lender will also review your credit history, credit score and income before approving you for a specific loan amount.

However, there are some big differences between VA loans and the loans available to the average civilian, like conventional loans and FHA loans backed by the Federal Housing Administration (FHA).

Unique VA loan benefits include:

  No down payment

Most VA borrowers won’t be required to make a down payment if they don’t want to. Sometimes, though, it makes good financial sense to put money down — it can reduce your VA funding fee (more on that below), and you’ll end up with a smaller loan amount. The smaller the loan, the less you’ll pay in interest and the faster you’ll build equity.

  No mortgage insurance

Most low- or no-down-payment loan programs available to civilians require you to pay for mortgage insurance, which covers lenders in case you default on your payments. The VA doesn’t require mortgage insurance on any of its loan types.

  Closing costs capped at 1%

VA lenders can only charge 1% of your loan to cover their fees, making VA loan closing costs more affordable than other loan programs. Neither FHA loans nor conventional loans have similar caps on origination or lender fees. Many lenders (those who work with veterans and civilians alike) charge around 1% on just their origination fee, but may also charge application, underwriting or processing fees.

  Special benefits for disabled veterans

Veterans with qualifying disabilities get some additional perks when they use their VA loan benefit:
VA funding fee exemption
 Property tax exemptions (check with your county tax assessor for more information)
 Eligibility for various disability housing grant programs, including:

  • Specially Adapted Housing (SAH) or Special Home Adaptation (SHA) grants, which offer up to $117,014 and $23,444, respectively, to help disabled veterans buy a house or improve one they already own to make it more accessible.
  • Temporary Residence Assistance (TRA) grants, which provide up to $47,130 to veterans to make accessibility alterations to a home owned by a family member.
  • Home Improvements and Structural Alterations (HISA) grants, which provide up to $2,000 for veterans who don’t have service-connected disabilities and up to $6,800 for veterans with service-connected disabilities.

Unique VA loan closing costs and fees include:

  VA funding fee

The VA funding fee helps offset the cost of the VA loan program to taxpayers. It costs 1.25% to 3.30% of the loan amount and is typically rolled into the total loan amount, even if you make no down payment. Disabled veterans are exempt from having to pay the funding fee.

  Higher VA home appraisal costs

An appraisal for a VA loan is usually more expensive than other home appraisals. Only VA-approved appraisers can complete one, and they’ll typically cost $500 to $1,200 — much more than the $300 to $500 usually spent on a conventional appraisal. In addition to establishing a fair property value, a VA appraisal ensures that the home meets special VA standards, known as “minimum property requirements” (we’ll describe these requirements in more detail later).

To find the best VA lender for you, gather loan estimates from at least three to five lenders and compare the terms they’re offering. Shopping around can save you thousands of dollars over the long haul, according to LendingTree data.

Below, we list our picks for the best VA lenders. They offer best-in-class service to veterans and service members looking to achieve homeownership.

Summary: The best VA mortgage lenders

LenderUser ratingsLendingTree ratingMin. credit score (VA loan)Min. down payment
(2,613)
User Ratings & Reviews rating-reviews-tooltip-icon

Ratings and reviews are from real consumers who have used the lending partner’s services.


Read review


Best overall VA lender
5800% with full entitlement
(3,526)
User Ratings & Reviews rating-reviews-tooltip-icon

Ratings and reviews are from real consumers who have used the lending partner’s services.


Read review


Best for transparency
6200% with full entitlement
User reviews coming soon

Read review


Best for online experience
Not disclosed0% with full entitlement
(89)
User Ratings & Reviews rating-reviews-tooltip-icon

Ratings and reviews are from real consumers who have used the lending partner’s services.


Read review


Best for VA loans with bad credit
5000% with full entitlement

Best overall VA lender: Rocket Mortgage


Rocket Mortgage at a glance

  • Minimum credit score (VA loans): 580
  • Available VA loan programs: Purchase, streamline refinance (IRRRL), cash-out refinance
  • Additional loan products: Conventional, FHA, jumbo, home equity loans
  • LendingTree rating: Go to lendingtree.com

Why we chose Rocket Mortgage

Rocket Mortgage is one of the largest mortgage lenders in the game. It offers all of the essential VA programs: purchase, cash-out refinance and streamline refinance, also known as an interest rate reduction refinance loan (IRRRL). On top of that, military borrowers looking for a robust online loan experience will find that Rocket Mortgage offers an online application, rate information that’s updated regularly, detailed loan product information and resources to help you navigate the complex world of mortgage lending.

Read our Rocket Mortgage review.

Best lender for VA loan rate transparency: Veterans United


Veterans United at a glance

  • Minimum credit score (VA loans): 620
  • Available VA loan programs: Purchase, streamline refinance (IRRRL), cash-out refinance
  • Additional loan products: Conventional, FHA, jumbo
  • LendingTree rating: Go to lendingtree.com

Why we chose Veterans United

Veterans United specializes in mortgage lending tailored to the needs of military borrowers. And while the company offers conventional loans and other products that don’t require military service, more than 90% of its customers come specifically for a VA loan. The lender makes a variety of VA loan rate information available online and allows mortgage shoppers to tailor that information to their credit score. Veterans United’s attention to the details and needs of military borrowers also shines through in its rate information, which is updated daily and includes the VA funding fee.

Read our Veterans United review.

Best VA loan lender for online experience: Flagstar Bank

Flagstar Bank at a glance

  • Minimum credit score (VA loans): Not disclosed
  • Available VA loan programs: Purchase, streamline refinance (IRRRL)
  • Additional loan products: Conventional, FHA, jumbo, HELOC
  • LendingTree rating: Go to lendingtree.com

Why we chose Flagstar Bank

With nationwide reach, Flagstar issues home loans in all 50 states, offering both VA purchase loans and VA streamline refinances (IRRRLs). But the company really shines with its online experience: Flagstar publishes rates online, offers helpful product information and resources about mortgage lending on its website and has a convenient online application. And if you think a stellar online experience can only be had with an online bank, you may be pleasantly surprised to learn that Flagstar operates brick-and-mortar branches in several states.

Read our Flagstar Bank review.

Best lender for VA loans with bad credit: Carrington Mortgage Services


Carrington Mortgage Services at a glance

  • Minimum credit score (VA loans): 500
  • Available VA loan programs: Purchase, refinance, streamline refinance (IRRRL)
  • Additional loan products: Conventional, FHA, jumbo, USDA
  • LendingTree rating: Go to lendingtree.com

Why we chose Carrington Mortgage Services

The VA doesn’t set a credit score minimum for the loans it backs, but if you’re looking for a VA loan and have a low credit score, you’ve undoubtedly discovered that lenders often have a minimum. Carrington’s minimum credit score is set at 500, which is a whopping 218 points below the average for VA loans. No other VA lenders we reviewed are willing to lend to a borrower with a credit score lower than 580.

Read our Carrington Mortgage review.

Not everyone who served in the military automatically qualifies for a VA loan. Specific VA loan requirements and eligibility criteria must be met, which we have summarized below.

VA loan eligibility

Here’s what you’ll need to verify that you’re eligible:

  • A minimum amount of service. The exact requirement is based on what type of service member you are or were.
  • A certificate of eligibility (COE). This form, issued by the VA, proves that your VA loan benefits qualify you for a loan. You can request one online.

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What if my COE says I have '$0' of entitlement?


If your COE says that you have “$0” of basic entitlement left, don’t panic. You may still qualify for another VA loan by using your “bonus” entitlement. If you need help determining where your VA benefits stand, ask your lender or contact your local VA regional loan center.

VA loan requirements

These are the top five most important VA requirements you’ll need to meet:

  1. Have a steady employment history
    Lenders prefer a consistent, two-year job history, but may make exceptions at their discretion.
  2. Have a credit score above 500
    VA guidelines don’t require a minimum credit score, but many lenders set their minimums at 620. However, you may find lenders — like Rocket Mortgage and Carrington Mortgage Services — who will accept scores between 500 and 619 without too much trouble.
  3. Keep your DTI ratio below 41%
    Your debt-to-income (DTI) ratio measures your total monthly debt, including your new mortgage payment, divided by your gross (pretax) income.
  4. Stay within VA loan limits
    There are no loan limits for borrowers with full VA entitlement — however, if you’ve used your VA loan benefits before, you may be working with partial entitlement. For those with partial entitlement, the VA loan limit matches the current conforming loan limit.
  5. Meet the property requirements
    Any home financed with a VA loan must be “safe, sound and sanitary,” according to VA property guidelines.

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ProsCons

  No down payment: Making a down payment is optional, not required.

  No loan limits for most borrowers: Those with full entitlement have no loan limit.

  No income restrictions: Rich or poor, your income won’t bar you from using a VA loan.

  No mortgage insurance: Mortgage insurance that protects your lender in case of loan default isn’t required.

  Capped fees: Lenders can’t charge you more than 1% of the loan amount.

  Extra benefits for those with disabilities: Borrowers with qualifying disabilities get extra help with fees and grants (see below).

  Military service required: Eligibility is based on your military service history.

  VA funding fee: This fee can be up to 3.6% of the loan amount.

  Tougher appraisal requirements: The complex VA requirements must be applied by a VA-approved appraiser.

  Costly appraisals: VA appraisals are more expensive than those of conventional or FHA loans.

  Loan limits: A borrower with partial entitlement will have a loan limit.

  Primary residences only: VA loans can’t be used to finance a second home or investment property.

You’ll normally follow these five steps to apply for a VA home loan:

STEP 1: Shop for a lender

You might need customer service tailored to someone deployed overseas, or simply want the most competitive interest rate offer — either way, find a lender that caters to your needs.

STEP 2: Gather  documents

To get a VA mortgage preapproval you’ll typically need:

  • Certificate of eligibility
  • DD214 (discharge or record of separation paperwork)
  • Leave and earning statement (if you’re on active duty)
  • Child care statement
  • Nearest living relative statement
  • Two years of W-2s
  • 60 days of bank statements
  • Letters of explanation for credit issues, gaps in employment or large deposits in your asset accounts

The VA caps lender fees at 1% of your loan amount, so avoid VA lenders that quote costs any higher than that.

STEP 3: Find your home and get it appraisedYour lender will need to order your appraisal from a VA-approved inspector. Check the appraisal for any repair requirements and be prepared to negotiate with the seller if anything needs to be fixed.

STEP 4: Review your closing disclosureThe lender will issue your closing disclosure at least three business days before your closing date. That’s a great time to make sure you aren’t being charged a funding fee if you meet the requirements for an exemption.

STEP 5: Transfer funds and sign your documentsYou’ll typically need to attend your closing in person at a title company, escrow office or attorney’s office. Once your loan funds are wired, the property title is recorded into your name and you’re officially a homeowner!

Before you commit to any loan, it’s important to weigh the pros and cons of the exact loan you’re being offered. For a VA loan, you should evaluate whether:
 It’ll help you meet your financial goals
 You can find a lower interest rate elsewhere
 The true cost of borrowing — also known as the loan’s annual percentage rate (APR) — is competitive
 The monthly PITI payments will fit in your budget comfortably

If you’re eligible for a VA loan, it’s likely a great option you should seriously consider. VA loans typically have extremely competitive interest rates, forgiving qualification requirements and many other beneficial loan terms.

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Yes, VA loans are assumable. Just be sure you’ve done your due diligence and know the pros and cons of assuming a VA mortgage.

No, the VA doesn’t require private mortgage insurance (PMI). Instead of the borrower paying for insurance to cover a lender’s potential losses, the VA offers a guaranty that covers the cost of lender losses (equaling up to 25% of your loan amount) if you default. The VA also charges you a funding fee worth 1.4% to 3.6% of your loan amount to offset the program cost to taxpayers.

You can use your VA loan benefit as often as you wish, as long as you have sufficient entitlement to buy a home and are purchasing a primary residence. Your VA loan entitlement is a lifetime benefit.

You’ll usually pay 2% to 6% in VA loan closing costs depending on your loan size. However, VA-approved lenders can’t charge more than 1% of your loan amount in lender fees.

Eligible veterans typically don’t need any down payment. However, you may need one if you have an outstanding VA loan on another home and don’t have enough entitlement to cover the guaranty on the new loan. If you’re not sure where you stand, request a COE or check with your loan officer.

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Recommended Reading

How we chose our picks for the best VA lenders

To determine the best VA loan lenders, we reviewed data collected from 35 lender reviews completed by LendingTree editorial staff in 2023.

Each lender review gives a rating between 0 and 5 stars based on several features including digital application processes, available loan products and the accessibility of product and lending information. To evaluate VA-specific factors, we awarded extra points to lenders that publish VA mortgage rates online, offer at least three VA loan types (VA purchase loans, VA streamline refinances and VA cash-out refinances) and accept credit scores at or above 620.

Our editorial team brought together all of the data about lenders in our reviews, as well as the scores awarded for VA-specific characteristics, to find the lenders with a product mix, information base and guidelines that best serve the needs of VA loan borrowers. To be considered for our “best overall” pick, lenders must have the footprint to issue mortgages in at least 35 states.