VA loans through the U.S. Department of Veterans Affairs are available to qualified veterans and military members. The VA does not make loans, but insures loans made available to veterans. The VA guarantees loans made by us to give veterans better rates and terms.
The VA Loan Guaranty Program was put in place in 1944 to help veterans returning from war afford a home. Over 18 million veterans have since used the program. Along with offering loans to buy a home, a VA loan can be used to refinance a VA loan, take cash out of a home, repair or improve an existing home, make energy efficient improvements, and much more.
To get a VA loan, the borrower must first get a Certificate of Eligibility from the Department of Veterans Affairs. This certificate states that the borrower has a VA entitlement and can participate in the program. A VA-approved lender can help a borrower obtain the form, or the veteran can request it online.
VA loans are very popular because they do not require a down payment and underwriting standards are looser, compared with conventional mortgages. About 80 percent of VA borrowers could not qualify for a conventional home loan.
Most veterans can obtain a VA loan without a down payment or paying closing costs out-of-pocket, but a VA funding fee must be paid.
This funding fee will be charged on every VA loan.
VA loans are the best loan option for most people who qualify, especially those with a lower credit score or income. The VA mortgage program is one of the best available with very low interest rates, looser underwriting standards, no private mortgage insurance, and no need to put any money down.