A VA loan is a mortgage backed by the U.S. Department of Veterans Affairs (VA) that helps eligible military borrowers purchase, build, improve, or refinance a home.
VA loans are offered through participating mortgage lenders, while the VA guarantees a portion of the loan. This government backing allows lenders to offer benefits such as no down payment for qualified borrowers, competitive interest rates, and no monthly mortgage insurance.
VA loans are available to eligible Veterans, active-duty service members, certain National Guard and Reserve members, and qualifying surviving spouses.
You can use your VA home loan benefit more than once, and you do not have to be a first-time homebuyer.
VA home loans offer several advantages to eligible borrowers.
Our team can help you understand how these benefits apply to your specific situation.
VA loan eligibility is generally based on military service history, duty status, and other qualifying circumstances.
You may be eligible if you’re a:
The minimum service requirements vary depending on when and how you served.
Some borrowers may qualify under exceptions even if they have not met the standard minimum service period.
A Certificate of Eligibility (COE) is a document issued by the Department of Veterans Affairs that confirms whether you meet the military service requirements for the VA home loan benefit.
Your COE also provides information about your available VA entitlement.
You generally need a COE to obtain a VA-backed mortgage, but you don’t have to figure out the process alone.
A Michigan Mortgage Loan Officer can help you request your COE and review your next steps.
Learn More About VA Loan Eligibility
In addition to meeting VA service eligibility requirements, borrowers must satisfy applicable financial and property guidelines.
The Department of Veterans Affairs does not establish a minimum credit score for VA-backed mortgages.
However, individual mortgage lenders may set their own credit score requirements.
Lenders also evaluate your payment history, income, existing debts, and overall financial profile.
Even if your credit isn’t perfect, you may still have options worth exploring.
One of the biggest advantages of VA financing is the opportunity to purchase a home without making a down payment.
For eligible borrowers with sufficient VA entitlement, the minimum down payment may be 0%.
Here’s how that compares with common minimum down payments on other loan programs:
| Home Purchase Price | VA Loan: 0% Down | FHA Loan: 3.5% Down | Conventional Loan: 3% Down |
|---|---|---|---|
| $200,000 | $0 | $7,000 | $6,000 |
| $250,000 | $0 | $8,750 | $7,500 |
| $300,000 | $0 | $10,500 | $9,000 |
| $350,000 | $0 | $12,250 | $10,500 |
These examples show minimum down payments for qualified borrowers, not total cash needed to close. Closing costs, prepaid expenses, and other costs may apply. Conventional 3% down financing is limited to eligible programs and borrowers.
A down payment may still be required in certain VA loan situations, including when a borrower has insufficient remaining entitlement or the purchase price exceeds the property’s appraised value.
VA loans do not have a universal minimum income requirement.
Lenders evaluate your qualifying income, employment history, and ability to repay the mortgage.
Eligible income may include military pay, civilian employment, retirement income, and other qualifying sources.
VA lenders evaluate your debt-to-income ratio (DTI), which compares your monthly debt obligations with your qualifying monthly income.
The VA also places importance on residual income, or the money remaining after certain monthly obligations and living expenses are considered.
Residual income requirements vary based on factors such as family size and geographic region.
This approach helps lenders evaluate whether borrowers have sufficient income remaining to manage everyday living expenses.
Homes purchased with VA financing must meet applicable property eligibility and minimum property requirements.
VA loans generally require the home to serve as the borrower’s primary residence, subject to certain occupancy exceptions.
Eligible properties may include:
Property eligibility and lender requirements vary.
No. VA loans do not require monthly private mortgage insurance (PMI), even when a borrower purchases a home with no down payment.
This is a significant difference between VA loans and many conventional or FHA mortgages.
For example, qualified conventional borrowers purchasing with less than 20% down generally pay PMI, while FHA borrowers pay mortgage insurance premiums.
VA loans avoid these monthly mortgage insurance costs, although most borrowers must pay a one-time VA funding fee unless they qualify for an exemption.
The VA funding fee is a one-time charge that helps support the VA home loan program.
The amount depends on factors such as whether you’ve used your VA loan benefit before and how much you put down.
For standard VA purchase loans, the funding fee rates are:
| Down Payment | First Use | Subsequent Use |
|---|---|---|
| Less than 5% | 2.15% | 3.30% |
| 5% or more | 1.50% | 1.50% |
| 10% or more | 1.25% | 1.25% |
These rates apply to borrowers who are not exempt from the funding fee. Different rates may apply to other VA loan types.
The funding fee may generally be paid at closing or financed into the mortgage.
Some borrowers are exempt from paying the VA funding fee.
Exemptions may apply to:
Your Certificate of Eligibility and applicable VA records can help establish your funding fee exemption status.
Yes. Sellers may contribute toward certain closing costs for buyers using VA financing.
VA guidelines distinguish between ordinary closing costs and seller concessions.
Seller credits toward eligible loan closing costs are not subject to the VA’s 4% seller concession limit.
However, certain additional seller concessions, such as paying the VA funding fee or certain buyer debts, are generally limited to 4% of the property’s reasonable value.
The specific costs that may be covered depend on VA requirements and the transaction.
A Michigan Mortgage Loan Officer can help you and your Realtor understand how seller contributions may be structured.
For eligible borrowers with full VA home loan entitlement, the VA generally does not impose a county loan limit.
However, this does not mean borrowers can obtain an unlimited mortgage.
Your lender must still determine how much you qualify to borrow based on your income, credit history, debts, and other financial factors.
The property’s appraised value also matters.
Borrowers with partial or remaining entitlement may face additional requirements, and a down payment may be necessary in some situations.
Our team can help determine how your available entitlement affects your financing options.
VA, conventional, and FHA mortgages each offer different benefits and qualification requirements.
| Feature | VA Loan | Conventional Loan | FHA Loan |
|---|---|---|---|
| Minimum Down Payment | 0% for eligible borrowers | As low as 3% | As low as 3.5% |
| Military Eligibility Required | Yes | No | No |
| Monthly Mortgage Insurance | No | Generally with less than 20% down | Yes |
| Credit Score | No VA-set minimum; lender requirements vary | Varies by program | FHA guidelines generally allow 580 for 3.5% down |
| Upfront Program Fee | VA funding fee unless exempt | No VA-style funding fee | Upfront FHA mortgage insurance |
| Primary Residence | Generally required | Depends on program | Generally required |
| Reusable Benefit | Yes, subject to entitlement | Not applicable | May be used for multiple eligible transactions |
VA financing may provide significant savings for eligible borrowers, particularly because of its no-down-payment option and lack of monthly mortgage insurance.
However, it’s still important to compare interest rates, closing costs, funding fees, and long-term expenses before choosing a loan.
Yes. VA home loan benefits are not limited to a single home purchase.
You may be able to use your benefit again after selling a home, paying off a previous VA loan, or restoring your entitlement.
In certain circumstances, eligible borrowers may also have more than one VA loan at the same time.
Your available entitlement, financial qualifications, and property requirements will determine your options.
If you’ve used a VA loan before, Michigan Mortgage can help you understand how much entitlement may still be available.
Yes. VA loan programs offer refinancing options for eligible homeowners.
Sometimes called a VA streamline refinance, an IRRRL allows eligible borrowers with existing VA loans to refinance under applicable VA requirements.
It may help borrowers obtain a lower interest rate, reduce certain payments, or move from an adjustable-rate mortgage to a fixed-rate mortgage.
Refinancing costs and eligibility requirements apply, and a lower payment is not guaranteed.
A VA cash-out refinance may allow eligible homeowners to replace their existing mortgage and access available home equity.
Funds may be used for qualifying financial goals, such as home improvements or debt consolidation.
A cash-out refinance increases the amount borrowed against your home and may increase total borrowing costs.
Our team can help you evaluate whether refinancing makes sense for your circumstances.
No down payment is required for many qualified VA borrowers with sufficient entitlement, provided the purchase price and appraisal support the transaction. Some circumstances may require a down payment.
The VA does not set a minimum credit score. However, mortgage lenders may have their own requirements and will review your overall financial qualifications.
Yes. VA loans are available to eligible first-time and repeat homebuyers. You may also be able to restore and reuse your VA home loan entitlement.
Not necessarily. VA loans often offer competitive interest rates compared with other mortgage programs. Your actual rate depends on factors such as market conditions, lender pricing, and your financial qualifications.
Yes. Eligible borrowers may use VA financing to purchase certain properties with up to four residential units, provided they meet applicable requirements and intend to occupy the property as their primary residence.
Possibly. Standard VA-financed properties must meet minimum property requirements. Certain VA renovation or purchase-and-improvement options may be available through participating lenders.
Yes. An eligible borrower may generally obtain a VA loan jointly with a spouse, subject to applicable underwriting requirements.
Yes. Certain surviving spouses may qualify for VA home loan benefits based on their circumstances and applicable eligibility requirements.
In some circumstances, yes. Borrowers with sufficient remaining entitlement who meet occupancy, income, credit, and other requirements may qualify for an additional VA loan.
Yes. Although VA loans may require no down payment, buyers can still have closing costs and prepaid expenses. Eligible seller credits, lender credits, and other permitted arrangements may help cover some costs.
Yes. Student loan debt does not automatically disqualify you. Lenders evaluate qualifying student loan payments and other obligations under applicable underwriting guidelines.
You can request a Certificate of Eligibility through the Department of Veterans Affairs. A participating mortgage lender may also be able to help you obtain it.
Your VA home loan benefit can be a valuable resource when purchasing or refinancing a home.
At Michigan Mortgage, we’re committed to helping eligible Veterans, service members, and military families understand their options and make informed financing decisions.
Our local Loan Officers serve homebuyers throughout West Michigan, including Muskegon, Grand Haven, Spring Lake, Holland, Grand Rapids, and surrounding communities.
Wondering how to make the most of your VA home loan benefit?
Let’s explore your options together.
All loans are subject to credit approval, underwriting requirements, VA eligibility, property eligibility, and applicable program guidelines. No down payment is available to qualified borrowers with sufficient entitlement. Closing costs and funding fees may apply. Loan terms and program availability are subject to change. Not all applicants will qualify.
