What is a VA loan and who is eligible?
A VA loan is a mortgage backed by the U.S. Department of Veterans Affairs, available to veterans, active-duty service members, National Guard/Reserves, and surviving spouses. Benefits include zero down payment, no PMI, competitive rates, and limited closing costs. Eligibility requires 90 days active duty (wartime), 181 days (peacetime), or 6 years National Guard/Reserves.
What is the VA funding fee?
The VA funding fee is a one-time fee: 2.3% for first use (no down), 3.6% for subsequent use. With 5% down: 1.65%/2.3%. With 10% down: 1.4%/1.65%. Disabled veterans with service-connected disability are exempt.
Do VA loans require a down payment?
No, VA loans require zero down payment for qualified borrowers with full entitlement. You can finance 100% of the purchase price. Making a down payment reduces the funding fee but is not required.
Can I use a VA loan more than once?
Yes, but the funding fee increases for subsequent uses. Your entitlement can be restored if you've paid off a previous VA loan or sold the property. You can have multiple VA loans in certain circumstances.
How does a VA loan compare to conventional?
VA loans offer: no down payment, no PMI, rates 0.25-0.5% lower, limited closing costs. Conventional may be better with 20% down and excellent credit (no PMI, no funding fee). VA loans save more for those with less than 20% down.
What is the VA loan limit for 2025?
There is no strict limit for borrowers with full entitlement. You can borrow as much as a lender approves without a down payment. The 2025 baseline conforming loan limit is $766,550.
Are VA loan rates lower than conventional?
Yes, typically 0.25-0.5% lower due to the VA guarantee reducing lender risk. Over 30 years, this can save tens of thousands in interest. Individual rates depend on credit score, DTI, and market conditions.
What closing costs can the seller pay?
Sellers can pay up to 4% of the loan amount plus VA-allowed charges. VA rules prohibit buyers from paying attorney fees (except title work), escrow fees, and some recording fees.