VA Loan
Definition and meaning of VA Loan in real estate.
A VA loan is a mortgage guaranteed by the US Department of Veterans Affairs that allows eligible veterans, active-duty service members, and select surviving spouses to buy a home with no down payment.
In more detail
These loans are issued by private lenders, such as banks and mortgage companies, but the federal government guarantees a portion of the loan to protect the lender against default. Because of this guarantee, borrowers can secure competitive interest rates and avoid paying private mortgage insurance, which is typically required on other low-down-payment loans.
Eligible borrowers must obtain a Certificate of Eligibility and the home must pass a strict appraisal to ensure it meets minimum property requirements.
Key facts
| Category | Mortgages & Financing |
|---|---|
| Guaranteed by | US Department of Veterans Affairs |
| Down payment requirement | Typically zero percent |
| Required document | Certificate of Eligibility |
A retired military officer utilizes a VA loan to purchase a home, allowing them to finance the full purchase price without paying any down payment or monthly mortgage insurance.
Frequently asked questions
Can you use a VA loan more than once?
Yes, eligible veterans can use their VA loan entitlement multiple times throughout their lives, provided they repay the previous loan or have their entitlement restored.
What is the VA funding fee?
The VA funding fee is a one-time fee paid directly to the Department of Veterans Affairs to help offset the cost of the program, and it can typically be rolled into the loan amount.