A VA loan is a mortgage loan guaranteed by the United States Department of Veterans Affairs. It is a valuable benefit for qualifying military veterans and active servicemen and women. They program offers no down payment options with flexible qualification guidelines.
Who is eligible for VA financing?
VA home loans are available to active service members, veterans (unless dishonorably discharged), and in some cases, surviving family members. You are probably eligible if one of the following is true:
- You’ve served 181 days of active duty during peacetime
- You’ve served 90 days of active duty during wartime
- You’ve served six years in the Reserves or National Guard
- Your spouse was killed in the line of duty and you have not remarried
- Your eligibility never expires. Veterans who earned their benefit in long ago are still using their benefit to buy homes.
About the VA funding fee
The VA charges an up-front fee to defray the costs of the program and make it sustainable for the future.
Veterans pay a lump sum that varies depending on the loan purpose, the veteran’s military experience, and down payment amount.
The fee is normally wrapped into the loan; it does not add to the cash needed to close the loan.
Note that not all veterans pay the funding fee. Veterans receiving compensation for a service-connected disability are exempt, as are surviving spouses of veterans killed or missing in action.