VA Loan 101
What the benefit actually is, in plain language, with the parts most ads leave out.
A loan guaranteed, not issued, by the VA
The VA does not lend you money. Private lenders make VA loans, and the Department of Veterans Affairs guarantees part of each one. That guarantee is why lenders can offer terms no conventional loan matches.
Your share of that guarantee is called entitlement. How much you have available determines how much you can borrow with no money down.
What the benefit includes
No down payment
Up to 100% financing on a qualifying owner-occupied primary residence, subject to entitlement, credit approval, and appraised value.
No monthly PMI
Conventional buyers under 20% down usually pay mortgage insurance monthly for years. VA loans carry none.
Competitive rates
Because the loan is partially guaranteed, VA rates are often lower than comparable conventional rates. Your rate depends on your own profile.
Reusable entitlement
Not a one-time benefit. Entitlement can be restored, and some borrowers qualify to hold two VA loans at once.
Two to four units
You can buy a property with up to four units as long as you occupy one of them as your primary residence.
No prepayment penalty
Pay the loan down or off early without a penalty.
Who it is for
Eligibility depends on service history, character of discharge, and available entitlement. Only the VA can confirm it.
- Active duty service members meeting minimum service requirements
- Veterans with a qualifying character of discharge
- Members of the Reserves and National Guard meeting service requirements
- Certain surviving spouses of service members