Veterans Administration (VA)
Definition and meaning of Veterans Administration (VA) in real estate.
The Veterans Administration, now officially the Department of Veterans Affairs, is a federal agency that guarantees home loans for eligible active duty service members, veterans, and surviving spouses.
In more detail
The agency does not issue the loans directly, but instead backs a portion of the mortgage, reducing the risk for private lenders. Because of this government backing, borrowers are not required to pay private mortgage insurance, which typically adds to monthly costs on other low-down-payment loans.
Borrowers must obtain a Certificate of Eligibility to qualify and pay a one-time funding fee, which can be rolled into the loan amount. VA loans also feature strict appraisal guidelines to ensure the property is safe and structurally sound before purchase.
Key facts
| Category | Mortgages & Financing |
|---|---|
| Benefit | No down payment required |
| Funding fee | Typically ranges from one to over three percent |
| Required document | Certificate of Eligibility |
A retired military officer uses a Veterans Administration loan to buy a new home with zero money down and avoids paying monthly mortgage insurance.
Frequently asked questions
Who is eligible for a Veterans Administration loan?
Active duty military members, veterans, National Guard members, reservists, and certain surviving spouses who meet service duration requirements are eligible.
Do VA loans require monthly mortgage insurance?
No, VA loans do not require monthly mortgage insurance, which distinguishes them from Federal Housing Administration and conventional loans.