VA Home Loans

VA Home Loans

Veterans interested in purchasing a home should consider obtaining a VA loan to do so. If you qualify, VA home loans provide substantial advantages.

The VA home loan program was developed as part of the G.I. Bill passed by Congress in 1944. Private mortgage lenders issue loans that are then insured by the Department of Veterans Affairs. VA loans may be available If you qualify and are an active-duty service member or reservist, member of the National Guard, or a surviving spouse of a service member who died while serving.

Private mortgage companies are willing to provide these loans because, if you default, the VA will pay the lender back a portion of the loan, up to $36,000. In 2018, almost 400,000 VA loans were originated.

If you do qualify, you are not required to contribute a down payment to the purchase price of the house. Although there is a limit to how much the VA will pay a mortgage company if you default, or your house goes into foreclosure, there is no set loan limit. Additionally, the VA does not require a minimum credit score, but the mortgage company might.

VA loans do not allow prepayment penalties, so if you make extra mortgage payments, and the loan matures earlier than it was originally scheduled to, you do not have to pay a fee. And you do not have to pay for mortgage insurance; however, the VA does charge a one-time funding fee that is determined based on the size of your down payment, if you made one. This fee may be waived if you are a surviving spouse or are receiving VA disability benefits.

You may be eligible if: you served six years in the National Guard or Reserves; you served 90 days of activity duty during wartime; you served 181 days of active duty during peacetime; or you are the surviving spouse of a service member who died while serving.