Who can use a VA loan
The Department of Veterans Affairs sets eligibility by service. Veterans, active-duty service members, National Guard and Reserve members who meet the service requirement, and certain surviving spouses can qualify. The VA does not lend the money. It guarantees part of the loan, and a private lender makes it.
Eligibility is documented with a Certificate of Eligibility (COE). The VA describes the COE as the first step. You can request it on VA.gov, by mail on VA Form 26-1880, or through a lender, who can often pull it electronically. A COE is not a loan approval. The lender still reviews income, debts, and the house.
More on timing: COE timing checks before house hunting.
No down payment
The VA does not require a down payment when entitlement is full and the price fits what the lender will approve. With partial entitlement, a down payment may be needed above the county loan limit. The VA publishes the county limits. This page does not quote them.
VA loans do not charge monthly private mortgage insurance. The one-time funding fee, below, is the charge the VA uses instead.
The VA funding fee, and who is exempt
The VA funding fee is a one-time charge on most VA-backed loans. It is not monthly mortgage insurance. Per the VA, you can pay it at closing or add it to the loan amount. The VA sets the fee and publishes the current table. This page does not quote that table.
Per the VA, you do not pay the funding fee if any of these is true:
- You receive VA compensation for a service-connected disability.
- You are eligible for that compensation but receive retirement or active-duty pay instead.
- You are a surviving spouse receiving Dependency and Indemnity Compensation.
- You are a service member with a proposed or memorandum disability rating issued before closing, based on a pre-discharge claim.
- You are on active duty and received a Purple Heart on or before closing.
The COE is where a lender looks first. See funding fee exemption checks.
Entitlement
Entitlement is the portion of the VA guaranty still available to you. It is full when you have not used the benefit, or when a prior VA loan is paid off and the entitlement is restored. If a prior VA loan is still open, you may have only partial entitlement left, and a down payment may be required above the county limit.
Basic entitlement and bonus entitlement are VA terms for how that guaranty is counted. The dollar amounts change, and a lender can add its own cap. Ask us to confirm what is left before you write an offer. Related reading: entitlement and occupancy checks.
Questions borrowers ask
Who can use a VA loan?
The Department of Veterans Affairs sets eligibility by service. Veterans, active-duty service members, National Guard and Reserve members who meet the service requirement, and certain surviving spouses can qualify. The Certificate of Eligibility is how a lender confirms that record.
What is a Certificate of Eligibility?
A Certificate of Eligibility, or COE, is the VA record a lender reads for the home loan benefit. The VA describes it as the first step. You can request it on VA.gov, by mail, or through a lender. It is not a loan approval.
Do VA loans require a down payment?
The VA does not require a down payment when entitlement is full and the lender approves the loan. With partial entitlement, a down payment may be needed above the county limit. Ask us to confirm which case applies.
Who does not pay the VA funding fee?
Per the VA, the funding fee is waived for a veteran receiving VA disability compensation, a veteran who is eligible for that compensation but receives retirement or active-duty pay instead, a surviving spouse receiving Dependency and Indemnity Compensation, a service member with a proposed or memorandum rating before closing, and an active-duty member who received a Purple Heart on or before closing.
What is VA entitlement?
Entitlement is the portion of the VA guaranty still available to you. It is full when you have not used the benefit, or when a prior VA loan is paid off and the entitlement is restored. If a prior VA loan is still open, you may have only partial entitlement left. Ask us to confirm what is left.
Sources
Program facts on this page are summarized from the U.S. Department of Veterans Affairs. A lender can add stricter requirements.