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Veterans and military members have access to a valuable mortgage loan program that’s not available to civilians. These mortgages are called VA Loans and are backed by the Department of Veterans Affairs. The VA Loan comes with a number of significant benefits for those who qualify. Let’s dive into these benefits more in-depth.

No Down Payment

One of the biggest VA home loan benefits is that there’s no down payment. That’s right: If you’re eligible for a VA loan, you’re not required to make a down payment of any size. For many, this can make it easier to not just buy a house — but buy one sooner, too.

Other mortgage options, like FHA loans and conventional loans, for example, require at least 3% to 3.5% down — and that’s for borrowers with even the best credit scores. So, on a $250,000 home, a traditional buyer would need at least a $7,500 down payment. A VA buyer? They’d need nothing.


VA loans also require no Private Mortgage Insurance (PMI), as many other loan programs do. Though VA loans do come with an upfront funding fee, the cost of this pales in comparison to mortgage insurance, which can cost you both at closing and monthly for the life of your loan. According to Freddie Mac, PMI costs about $30 to $70 per month on conventional loans.

Here’s what the upfront funding fee looks like for VA homebuyers:

VA Funding Fee for VA Homebuyers

Down Payment First VA Loan Subsequent VA Loans
$0 Down 2.15% 3.3%
5% or more 1.5% 1.5%
10% or more 1.25% 1.25%

Lower Interest Rates

The Department of Veterans Affairs guarantees VA loans, which means it will repay lenders for a portion of their losses should a borrower fail to make payments. This reduces the risk that lenders shoulder on VA loans and allows them to offer better interest rates and more favorable terms to borrowers.

It’s true: VA loans have the lowest average rates of all loan types. And a lower interest rate? That can save you lots of money — both long-term and on your monthly payment.

Closing Cost Limits

With VA loans, lenders can’t charge you an arm and a leg in closing costs. In fact, on a VA loan, the seller can actually pay all of your loan-related closing costs — plus up to 4% more in concessions. This can lower your upfront costs considerably and make buying a home much more affordable.

Relaxed Credit Requirements

The Department of Veterans Affairs doesn’t have set credit score minimums for VA loans. Though most lenders set their own credit thresholds, typically around 620, these are usually much lower than what you’d find on a conventional mortgage or USDA loan.

A Lifetime Benefit + Second-Tier Entitlement

As long as you meet the service requirements, your VA loan benefit won’t expire, and in some cases, you may even be eligible to hold multiple VA loans at once. You can also use your VA loan benefit time and time again when you buy a new house.

No Loan Limits

VA loans don’t come with set limits. Instead, you can borrow as much as you need (and can afford, of course) without making a down payment. Keep in mind that your lender will still need to evaluate your finances and ensure you can comfortably pay for the loan you’re applying for. Use this calculator to see how much you might be eligible to borrow.

VA Loan Assumability

VA loans are assumable, meaning someone else can take over your loan should you sell your house later on. They’ll be subject to VA and lender approval, of course, but if they’re eligible, it can mean big benefits. (For one, they’d get your low-interest rate!)

In some cases, this might also allow a spouse to take over your mortgage should something unforeseen happen.

The VA Appraisal

The VA wants to make sure Veterans and military members are purchasing safe, hazard-free, and fully habitable homes, and the program’s very strict appraisal process ensures all VA-financed properties are in good condition. If you buy a home that passes a VA appraisal, you can rest assured it’s a safe place to live.

VA Loan Refinancing

Once you have a VA loan, you have two options to refinance later on: the Interest Rate Reduction Refinance Loan or the VA cash-out refinance. These can allow you to lower your interest rate and monthly payment or turn your equity into cash. The latter can be smart if you have sudden expenses like medical bills or if you want to cover home improvements.

How to Take Advantage of VA Home Loan Benefits

To leverage all these VA loan advantages, you’ll first need to meet the military service requirements set out by the VA.

These include:

  • Having served 90 consecutive days of active service during wartime, OR
  • 181 days of active service during peacetime, OR
  • 6 years in the National Guard or Reserves, OR
  • Be the spouse of a service member who has died in the line of duty or as a result of a service-related disability.

Beyond this, you’ll also need to meet your VA lender’s credit score and other requirements. Learn more about VA loan eligibility now or, if you think you may be eligible for a VA loan, request your VA Certificate of Eligibility today.

Compare VA Lenders

There are many benefits of a VA loan, but remember: Only VA-approved lenders can issue these mortgages. Considering a VA loan for your home purchase? See how popular VA lenders measure up below:

Compare Top VA Lenders

Find the right VA Lender for your homebuying journey.

ICB Solutions is a division of Neighbors Bank, which is an affiliate of Mortgage Research Center, LLC dba Veterans United Home Loans.

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