For many veterans and active duty military personnel, VA financing is one of the most valuable benefits of military service. These loans are backed by the U.S. Department of Veterans Affairs and make homeownership more achievable with low upfront costs, no need for private mortgage insurance, and flexible credit requirements.
With Veterans Day approaching, it’s a good time to take a look at this powerful program and understand how it works. This Redfin guide explains who’s eligible, the key benefits, and how to get the most out of your VA loan when buying or refinancing a home.
What is a VA loan?
A VA loan is a type of home loan guaranteed by the U.S. Department of Veterans Affairs. It is designed to allow eligible military personnel, veterans, and surviving spouses to purchase or refinance a home with favorable loan terms, often with no down payment required.
The VA does not lend money directly (except in rare cases), but it guarantees a portion of the loan. This means that if the borrower defaults, the VA will cover a portion of the lender’s losses. This guarantee allows lenders to offer competitive interest rates and flexible eligibility criteria.
Why does the VA loan program exist?
The Veterans Loan Program was established in 1944 as part of the original GI Bill to help military members transition to civilian life and build financial stability. Since then, we’ve helped more than 28 million veterans and their families buy, build or refinance a home.
VA loans in today’s market
VA loans are becoming slightly more common as the housing market tilts in favor of buyers and sellers are more willing to offer lower down payments, according to a recent report from Redfin. Nationally, 7.3% of homebuyers who took out a mortgage in August 2025 used a VA loan, up from 6.5% in the same period last year and the highest share for the same month since 2019.
These loans are most widespread in communities with a strong military presence. In Virginia Beach, Virginia, more than 43% of mortgage buyers took out VA loans in August, the highest share of any major U.S. metro and the largest ever for the region. Jacksonville, Florida (17%), Washington, DC (17%), San Diego, California (15%), and Las Vegas, Nevada (12%) also rank among the top markets for VA loans. Veterans loans are most common in these areas because each has a large military presence.
Who is eligible for a VA loan?
You may be eligible for a VA loan if you meet at least one of the following:
military and veterans
90 consecutive days of active duty during wartime, or 181 days of active duty during peacetime, or six or more years of active duty in the National Guard or Reserves.
surviving spouse
Surviving spouses of veterans who die in the line of duty or unmarried surviving spouses of veterans who die from a service-related disability may also be eligible.
Certificate of Eligibility (COE)
A COE from VA is required to prove eligibility. Most lenders will help you apply online. Alternatively, you can apply through the VA’s eBenefits portal.
Tip: Even if you have previously used VA loan benefits, you can become eligible again with Eligibility Restoration.
Types of VA loans
Not all VA loans are intended for home purchases. Some loans are designed to help you refinance, renovate, and even leverage your home equity. No matter your financial situation or goals, here’s a look at the main types of VA loans and what each one has to offer.
Your financial institution can help you decide which VA loan type fits your financial goals.
VA Loan Type Purpose Key Features VA Purchase Loan Buy a primary residence No down payment in most cases, no PMI, competitive interest rates. VA Cash Out Refinance Tap into your home equity by refinancing your current mortgage. Up to 90% of your home’s value is available as cash and can be used to refinance non-VA loans. VA Interest Rate Reduction Refinance Loan (IRRRL) Refinance your existing VA loan to reduce your interest rate. Streamlined process with minimal documentation. In many cases, no appraisal or income verification is required. VA Jumbo Loans Buy a more expensive home that exceeds the conforming loan limit If you have full title, there are no formal VA loan limits. Lenders’ criteria may vary. Native American Direct Loan (NADL) Provided directly by the VA (rather than a private lender) to purchase, build, or improve homes on federal trust land. Available to eligible Native American Veterans. VA Renovation Loan (Less Common) Purchase or Refinance and Repair or Improvement Financing Combine purchase/refinance and renovation costs into one VA-backed loan.
VA Loan Limits
The VA does not place a limit on the amount you can borrow as long as your eligibility is not affected, meaning that some of your VA benefits have already been used for another loan or have been fully restored.
If loan limits apply, they are typically based on traditional loan limits. The 2025 limit is $806,500 for one-unit real estate in most areas of the United States. Lenders also use these traditional limits as a starting point for VA jumbo loans.
Some high-cost areas have higher limits and more flexibility for qualified borrowers. And if you need to borrow more than your local limit, you may still qualify for a VA jumbo loan, which requires no down payment and offers lower interest rates than traditional jumbo loans.
VA loan benefits
VA loans have several benefits that make them particularly appealing.
No down payment required in most cases No private mortgage insurance (PMI) Lower average interest rates compared to conventional loans Flexible credit and income criteria Streamlined refinance options with VA IRRRL (Interest Rate Reduction Refinance Loans) Reserveable loans, meaning that qualified buyers can take over VA loans
For example, on a $400,000 home, a conventional loan with a 5% down payment would require $20,000 upfront plus PMI. With a VA loan, you can pay $0 down and skip PMI entirely, saving you thousands of dollars in the first year alone.
VA loan requirements
Although VA loans are known for their flexibility, there are still some important requirements that must be met.
Credit and Income: The VA sets general guidelines, but lenders set their own standards. Most companies look for a credit score of 620 or higher, but some will approve a lower score if you’re in good financial shape. Property: Your home must be your primary residence and meet VA’s Minimum Property Requirements (MPR). Funding Fee: Most borrowers pay a VA funding fee. This fee ranges from 1.25% to 3.3% of the loan amount, depending on your service history and down payment. Some veterans are exempt (e.g., veterans with service-connected disabilities). Residual Income: Lenders evaluate whether you have enough income left after monthly expenses. This is a unique VA requirement to prevent foreclosure.
Want to estimate your monthly payments on a VA loan? Use our mortgage calculator to see how loan amount, interest rate, and term affect your payments.
Can I use my VA loan benefit more than once?
Yes, VA loan benefits can be used multiple times. You can recover your full title by selling your current home, or use your partial title to buy another property if you keep your first home. This flexibility is especially valuable for military families who relocate frequently.
Comparing VA loans to other types of mortgages
Here’s how VA loans compare to conventional and FHA loans.
Features VA Loan Conventional FHA Down payment 0% (in most cases) 3%+ 3.5%+ No PMI / MIP No PMI Required if down less than 20% Credit score flexible Typically 620+ 580+ Funding fees Yes, 1.25-3.3% No Upfront MIP (1.75%) + Annually Assumable Yes Rare Yes
VA loans typically offer the best terms for those who qualify, especially when compared to conventional and FHA loans.
>>Read: Types of home loans
VA Loan Process: A Step-by-Step Guide
The process for a VA loan is similar to a traditional mortgage, but there are some important differences along the way. Here is an overview of the VA loan process.
Step What Happens Key Details 1. Check your eligibility Check your service history and get your COE. You can apply online or have your financial institution apply for it. 2. Find a VA-approved lender Work with your bank, credit union, or mortgage company. VA does not make direct loans (with the exception of Native American Direct Loans). 3. Get Pre-Approved Lenders will check your credit, income, and qualifications. This will help you set your budget and enhance your offer. 4. Search for a home Search for a home within the pre-approved amount. The home must be your primary residence. 5. VA Evaluation VA requires special evaluation. Verify that the property meets the VA’s Minimum Property Requirements (MPR). 6. The underwriting financial institution reviews the documents and closes the loan. You may be asked for additional information before closing. 7. Finish Sign the final documents and receive your keys. You can pay a one-time VA funding fee (which can be rolled into your loan).
>>Read: How to Buy a Foreclosed Home with a VA Loan
When a VA loan may not be right for you
While VA loans are a great option for many veterans and military personnel, they are not the best choice for every situation. You may want to consider a different loan type if:
If you’re buying a vacation or investment property: VA loans are for primary residences only. If you’re buying a second home or renting, you’ll need a traditional loan. Home Does Not Meet Veteran Real Estate Standards: Home must meet Veteran safety and livability requirements. Fixer-uppers may not qualify unless they are financed with a VA renovation loan. Funding fees may offset your savings. As previously mentioned, most borrowers pay a one-time VA funding fee. If your loan amount is small or you make a large down payment, the fee can negate some of the financial benefits of the loan.
Even if a VA loan isn’t right for you now, you may be able to qualify in the future. For example, if your fixer-upper doesn’t currently meet VA standards, you can qualify for a VA renovation loan once repairs are complete.
Frequently asked questions about VA loans
1. Can I use my VA loan for a second home or investment property?
no. VA loans are only for primary residences, but you can also reuse your benefits toward a new primary residence.
2. Are VA loans only available to first-time buyers?
no. You can use the benefits as many times as you like, as long as your rights remain.
3. Can I get a VA loan even if I have bad credit?
probably. The VA does not set a minimum score, but most lenders look for a score of around 620. Some may accept a lower score due to strong compensatory factors.
4. How long does it take for a VA loan to close?
On average, it takes 30 to 45 days, just like a traditional loan, but VA evaluations can take a little longer.
5. Do VA loans require mortgage insurance?
No, instead of PMI, you can usually get financing by paying a one-time financing fee.
