What is a VA loan?

VA loans are a type of home loan exclusively for military service members and veterans. VA loans are available through private mortgage lenders and backed by the VA. These loans often have lower credit score requirements than traditional mortgage loans, and you typically don’t need a down payment.

VA loans are guaranteed by the Department of Veterans Affairs, so if you can’t repay your loan, the VA will pay a set portion of the amount to your lender. You also could get more competitive interest rates and loan terms by applying for a VA loan.

There are a few different types of VA loans with purposes ranging from purchasing to refinancing. Make sure you familiarize yourself with the VA loan types in order to see which one best suits your situation.

VA loan requirements

While specific eligibility criteria vary depending on the mortgage lender, the basic requirement for a VA loan is service experience in the military, National Guard or Reserves for a predetermined amount of time (ranging from 90 days to six years, depending on your area of service).

Private mortgage lenders typically have more specific VA loan requirements, such as minimum income amounts and credit score ratings or a maximum debt-to-income ratio.

How to choose a VA lender

Every mortgage lender is different, so it’s important to find a lender that’s compatible with your circumstances. Below are a few tips to help choose the right VA lender for you.

• Decide if you want in-person or online services. If you like the convenience of an online lending process, check out VA lenders with an online service option. If you’d rather work with an in-person lender, find out which national lenders have branches in your area or look into working with a local VA lender.
• Read reviews and compare lenders. Apply for pre-qualification with more than one VA lender before choosing a company. Mortgage rates change frequently, and comparing rates and terms can help you find the best VA loan for your situation.
• Make sure you meet the lender’s VA loan requirements. Each mortgage lender has different VA loan requirements. While they tend to be less restrictive than the requirements for traditional mortgage loans, you should still familiarize yourself with the eligibility requirements. Ask potential lenders about any credit score, down payment or income requirements they have for VA loans.
• Double-check that the lender offers the services you’re interested in. VA loans aren’t limited to new home purchases. If you want to refinance an existing VA-backed loan, make sure your potential lender offers this service before committing to work with them.

How to apply for a VA home loan

Applying for a VA loan is very similar to applying for a traditional mortgage loan. However, there are a few extra steps you need to take to confirm your eligibility and move forward with the lending process:

1. Verify your eligibility. Before you apply for a VA loan, make sure you’re eligible by reading over the VA’s requirements.
2. Find a VA loan lender and get preapproved. You can get preapproved for a loan by submitting documentation like W-2s and pay stubs. If you have a preapproval letter, sellers might be more interested — it shows you can afford the house you want.
3. Apply for a Certificate of Eligibility (COE). Your lender uses your Certificate of Eligibility to verify that you meet all the eligibility requirements to fill out a VA home loan application. To find out what forms you need, check our guide to getting a VA COE.
4. Complete the VA loan application. When you apply for a VA loan, you’ll need to include information about your income and debt. You’ll also authorize the lender to pull your credit history. Your lender will work with you on your VA home loan application to make sure you have all the necessary information. Plan to wait 30 days for your VA loan approval.
5. Schedule your VA appraisal. VA loans can’t be approved above a home’s appraisal price, so VA lenders are required to order an appraisal to ensure the property meets VA standards and determine its value. VA appraisals generally take about 10 days, but they can take longer, especially in parts of the country where there’s a high demand for VA loans.
6. Have your VA loan underwritten. Underwriters verify that your loan is accurate and determine whether or not you’ll be able to make your monthly mortgage payments.
7. Close on your property. The last step in securing a VA loan is closing on your new home. You’ll have to pay your VA loan guarantee to the VA office within 15 days of closing. You can pay it upfront in cash or roll it into your monthly payment. First-time homebuyers have to pay a 1.75% guarantee fee, and all other homebuyers pay a 2.25% guarantee fee.