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Your Complete Guide to the VA Home Loan

What is a VA Loan?

The VA loan is a $0 down mortgage option available to Veterans, Service Members and select military spouses. VA loans are issued by private lenders, such as a mortgage company or bank, and guaranteed by the U.S. Department of Veterans Affairs (VA).

The VA Home Loan was created in 1944 by the United States government to help returning service members purchase homes without needing a down payment or excellent credit. This historic benefit program has guaranteed more than 24 million VA loans, helping veterans, active duty military members and their families purchase or refinance a home.

Today, the VA Mortgage is more important than ever. In recent years, lenders nationwide have tightened their lending requirements in the wake of the housing market collapse, making the VA loan a lifeline for Veterans and active Military homebuyers, many of whom find difficulty when faced with tough credit standards and down payment requirements.

Like all home loans, VA Mortgages have considerable details and information to review. We encourage you to use our website's educational resources to learn about the specifics of this exclusive home loan benefit. To start your VA Loan, talk with a Home Loan Specialist today.

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VA Loan vs. Traditional Mortgages

Veteran and military homebuyers have access to one of the most unique and powerful loan programs ever created. See how the VA Loan compares to a traditional home mortgage:

VA Loans Conventional Loans
0% Down
(for qualified borrowers)

VA Loans are among the last 0% down home loans available on the market today.

Up to 20% Down

Conventional loans generally require down payments that can reach up to 20% to secure a home loan, pushing them out of reach for many homebuyers.

No PMI

Since VA Loans are government backed, banks do not require you to buy Private Mortgage Insurance.

PMI Required

Private Mortgage Insurance is a requirement for borrowers who finance more than 80% of their home's value, tacking on additional monthly expenses.

Competitive Interest Rates

The VA guaranty gives lenders a greater degree of safety and flexibility, which typically means a more competitive rate than non-VA loans.

Increased Risk for Lenders

Without government backing, banks are taking on more risk which, in turn, can result in a less-competitive interest rate on your home loan.

Easier to Qualify

Because the loan is backed by the government, banks assume less risk and have less stringent qualification standards for VA Loans, making them easier to obtain.

Standard Qualification Procedures

Conventional options hold stricter qualification procedures that can put homeownership out of reach for some homebuyers.

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Regulations and Fees

Although the VA Loan is a federal program, the government generally does not make direct loans to veterans. Instead, private lenders including Veterans United Home Loans finance the loan while the Department of Veterans Affairs offers a guaranty.

This guaranty, which protects the lender against total loss should the buyer default, provides incentive for private lenders to offer loans with better terms.

Loan Limits

In most parts of the country, veterans who qualify for the VA Loan can purchase a home worth up to $726,525 without putting any money down; however, with the 2019 VA Loan Limits, borrowers in high-cost counties may be able to purchase homes far exceeding that amount without a down payment. To find out the VA Loan Limit in your area, give us a call toll-free at (808) 465-3600 or use our online Loan Limit Calculator.

Funding Fees

The VA Funding Fee goes directly to the VA to ensure the program keeps running for future generations of Veteran and military homebuyers by removing any additional burdens off tax payers and veterans. The fee varies depending on the borrower's circumstances and does not apply for veterans with service-connected disabilities. For example, if this is your first time using the VA Home Loan Program, the funding fee is typically 2.15 percent of the purchase price of the home. For subsequent use of your VA Loan benefit, the fee is 3.3 percent.

VA borrowers can roll the funding fee into their overall loan amount. The VA also limits closing costs for veterans and allows sellers to pay most or all of those expenses. Many of our borrowers purchase a home with no money due at closing.

To calculate your VA Funding Fee, use Veterans United Home Loans' Funding Fee Calculator, or learn more about VA Loan eligibility in our next section.