VA Loan Eligibility and Guidelines
A VA loan (Department of Veterans Affairs) lets eligible veterans, service members, and surviving spouses buy a home with no down payment and no monthly mortgage insurance. To qualify, you need enough service to earn your Certificate of Eligibility, a steady income that passes the VA’s residual income test, and a home that you will live in and that meets VA property standards. The VA does not set a minimum credit score, and there is no cap on how much you can borrow if you have full entitlement, although the VA lender still decides what you qualify for.
The VA backs the loan but does not lend the money. A VA-approved lender does, and it follows the VA’s rules plus a few of its own. Here is what those rules look like in 2026, from who qualifies to what the property has to meet.
What Makes a VA Loan Different
Most mortgages are built around a down payment and monthly mortgage insurance. VA home loans are built around your service. Here are the features that set them apart.
The Government Backs Part of the Loan
The VA guarantees a portion of every approved VA home loan. If a borrower stops paying and the home is foreclosed, the VA repays the lender part of the loss. Think of it as a co-signer that lenders trust. That backing is why lenders can offer terms they could not offer otherwise.
No Down Payment Required
With full entitlement, you can buy with nothing down, which is rare among mortgage programs. Many other loans ask for between 3% and 20%. Skipping the down payment can save you tens of thousands of dollars in cash up front. You can still put money down if you want to, and a down payment lowers your VA funding fee. See our guide to buying a home with no money down.
Flexible Credit Standards
The VA has no minimum credit score. Instead, the lender looks at your whole picture, including your income, your debts, and how you have handled credit. Some lenders set their own minimum scores, called overlays, which is why one lender may say no while another says yes. Learn more in our guide to mortgage overlays. If you are rebuilding after a bankruptcy, read about getting a VA loan after bankruptcy.
No Monthly Mortgage Insurance
Most loans with less than 20% down charge monthly private mortgage insurance. VA loans do not, which keeps your payment lower than a similar loan would be. You do pay a one-time VA funding fee (more on that below). To see what you are skipping, read our guide to mortgage insurance.
Limits on Closing Costs
The VA caps what a lender can charge in certain fees. The lender’s flat fee for its services is limited to 1% of the loan amount, and the VA does not allow separate charges for things like application, processing, document preparation, or rate lock. Third-party costs, such as the home appraisal and title work, are charged at actual cost. Sellers can also help: they can pay your closing costs and other concessions up to 4% of the home’s reasonable value, not counting normal discount points.
Competitive Interest Rates
The VA does not set interest rates. Lenders compete for VA business, so rates are often similar to or lower than conventional loan rates and FHA rates. See today’s rates.
Ways to Use a VA Loan
You can use a VA loan to purchase a home, build one, refinance, or fund repairs and improvements. Terms run up to 30 years, with fixed or adjustable rates. A VA adjustable-rate loan has caps on how much the rate can change at each adjustment and over the life of the loan.
No Prepayment Penalty
You can pay off a VA loan early, sell the home, or refinance without paying a penalty. If you sell after a few years, you simply repay the remaining balance.
Assumable by a Qualified Buyer
A VA loan can be taken over by another qualified buyer when you sell. If rates have gone up since you bought, your lower rate can be a selling point. The buyer still has to be approved by the lender, and a VA funding fee of 0.5% applies to an assumption.
Who Is Eligible for a VA Home Loan
Eligibility depends on how long you served and in what role. The exact rules vary by era, so your Certificate of Eligibility is the final word. In general:
- Active-duty service members: 90 continuous days of service.
- Veterans: Veterans who served since September 8, 1980 generally need 24 continuous months of service or the full period they were called to duty. Veterans of earlier eras have their own minimums, such as 181 days for service between 1975 and 1980 and 90 days for the Vietnam era. A discharge for a service-connected disability can qualify with less.
- National Guard and Reserve members: At least 90 days of non-training active duty, or six years of creditable service in the Selected Reserve. Time in the Individual Ready Reserve does not count.
- Surviving spouses: Spouses of service members who died in service or from a service-connected disability, and spouses of those missing in action or held as prisoners of war, may qualify. Remarriage after age 57 does not end eligibility if it was on or after December 16, 2003.
Service members need an honorable discharge to qualify as veterans, with some exceptions for other discharge types that the VA reviews.
Your Certificate of Eligibility
The Certificate of Eligibility (COE) is a VA document that proves you have earned the benefit and shows how much entitlement you have. Entitlement is the amount the VA will guarantee for your lender. A VA-approved lender can usually pull your COE online in minutes. You can also request it yourself through the VA’s online portal.
Proof of service is what the VA looks at. That can be a DD214 for veterans, a Statement of Service for active-duty members, or National Guard and Reserve documents such as an NGB Form 22 or 23B.
A COE Is Not a Loan Approval
This is a common mix-up. The COE tells the lender you qualify for the benefit. It does not mean you qualify for a mortgage. Your lender still reviews your income, debts, and credit and sends your file to an underwriter for a decision.
How You Qualify: Income, Debts, and Credit
VA underwriting is different from FHA and conventional. Instead of leaning only on your debt-to-income ratio, it puts residual income first.
Residual Income
Residual income is the money left over each month after your mortgage, other debts, taxes, and basic living costs like utilities and maintenance. The VA sets a minimum amount that depends on your region, your family size, and your loan amount. For example, for a loan of $80,000 or more, a family of four in the Midwest or South needs $1,003 left over each month. That amount is $1,025 in the Northeast and $1,117 in the West.
Service members and retirees get a break: the required amount is reduced by 5% for active-duty members and retired service members, and for certain other VA borrowers such as 100% disabled veterans. This test is a big reason the VA loan program has among the lowest foreclosure rates of any loan type.
Debt-to-Income Ratio
Your debt-to-income ratio (DTI) compares your monthly debts, including your new housing payment, with your gross monthly income. The VA’s guideline is 41%. That is not a hard cutoff. A lender can approve a higher DTI if you have high residual income, and the file is easier to approve if your residual income is at least 20% above the minimum. If your DTI is above 41% and your residual income falls short, the loan will be declined. For a deeper look, see our debt-to-income ratio guide.
Here is a simple example. Suppose you earn $60,000 a year, which is $5,000 a month. A 41% DTI means your housing payment plus car, credit card, and student loan payments should add up to about $2,050 a month or less.
Types of Income That Count
Lenders count your base pay, and they can include allowances like the Basic Allowance for Housing (BAH) and the Basic Allowance for Subsistence (BAS). VA disability benefits count as income and generally do not need to show that they will continue. Non-taxable income, such as BAH and disability payments, can be increased by 25% for the DTI calculation only. Lenders generally want to see a stable income history, commonly about two years, but you do not need a certain job title or many years with one employer. Two part-time jobs, or a full-time job plus disability pay, can work.
Student Loans, Collections, and Past Credit Problems
A few rules that trip up borrowers:
- Student loans: If your payments are deferred for 12 months or more past your closing date, the lender can count $0 a month. Otherwise, the lender uses the payment on your credit report, or 5% of the balance divided by 12 if no payment shows.
- Medical collections: These can be disregarded. They do not have to be paid off to get approved.
- Other collections: Lenders count 5% of the balance divided by 12 if there is no payment plan, but they do not have to be paid off.
- Bankruptcy and foreclosure: Chapter 7 or a foreclosure that is more than two years old can generally be disregarded, and a more recent one can sometimes be overcome with re-established credit and a documented reason. A Chapter 13 can qualify after 12 months of on-time plan payments with court or trustee approval. Learn more in our guide to getting a VA loan after bankruptcy.
You Must Live in the Home
VA loans are for your primary residence. You certify that you intend to live in the home, and you generally need to move in within 60 days of closing. Longer delays can be allowed for specific reasons, such as repairs, a scheduled retirement, or a deployment, but generally not more than 12 months.
If you are on active duty and cannot move in, your spouse or dependent child living there can satisfy the rule. Vacation homes and investment properties do not qualify. You can still purchase a home with up to four units, such as a duplex, as long as you live in one of them.
The VA Funding Fee
The VA funding fee is a one-time charge that helps keep the program running. You can roll it into your loan instead of paying it at closing. The fee is a percentage of the loan amount, and it depends on your down payment and on whether this is your first use of the benefit.
| Down Payment | First Use | Later Use |
|---|---|---|
| Less than 5% | 2.15% | 3.30% |
| 5% to 9.99% | 1.50% | 1.50% |
| 10% or more | 1.25% | 1.25% |
Other fees are lower. An IRRRL (streamline refinance) and a loan assumption each carry a 0.5% funding fee. A cash-out refinance carries 2.15% for first use and 3.3% for later use.
You may be exempt from the fee if you receive VA disability compensation, are entitled to compensation but receive retirement or active-duty pay instead, are a surviving spouse receiving Dependency and Indemnity Compensation, or are an active-duty service member with a Purple Heart. If your disability claim is still pending at closing, you pay the fee and are refunded if your rating is made retroactive to before closing. Your lender or loan officer will confirm your status from your COE.
How Much Can You Borrow?
If you have full entitlement, the VA has no maximum loan amount. Congress removed the cap through the Blue Water Navy Vietnam Veterans Act, effective January 1, 2020. Your lender decides how much you can borrow based on your income, residual income, and credit. See also our page on jumbo VA loans if you need a larger loan.
If you already have a VA loan and are using only part of your entitlement, a limit applies. The most the VA will guarantee with no down payment is based on your county’s loan limit, which is $832,750 for a one-unit home in most of the country in 2026. If your loan is bigger than what your remaining entitlement covers, you may need a down payment on the difference. Your lender can calculate this for you.
The Property You Buy
The VA has rules for the home too. Its goal is to make sure the home is safe, sound, and worth the price.
Minimum Property Requirements
The VA appraiser checks that the home meets the VA’s Minimum Property Requirements, which cover things like a safe electrical system, working plumbing and heating, a sound roof, a stable foundation, and safe drinking water. Read the full list in our guide to VA minimum property requirements.
Condos
VA loans can buy condos, but the condo project must be on the VA’s approved list. Unlike FHA, the VA does not offer spot approvals for single units. If the building is not approved, financing is very difficult, so check the status before you write an offer. Condos that are approved by HUD or USDA are generally accepted by the VA as well.
New Construction and the VA Builder ID
Buying a newly built home with a VA loan is still allowed, and the rules for builders recently changed. The VA no longer requires builders to have a VA Builder ID. Effective March 31, 2025, VA Circular 26-25-1 ended the requirement that a builder get a VA-issued builder identification number before the lender could request an appraisal and a Notice of Value. Many older articles, and even older VA handbook chapters, still say the ID is required. For most VA purchase and construction loans, it is not.
The ID is still required in two cases: loans involving a Specially Adapted Housing grant and Native American Direct Loans.
Dropping the ID does not mean anything goes. Here is what still applies:
- State and local licensing. Builders must still meet their state and local licensing rules.
- A builder warranty. The builder must still provide a one-year written warranty or an accepted 10-year insured protection plan.
- A VA appraisal. The home still needs a VA appraisal and Notice of Value, and it must meet the Minimum Property Requirements.
- Local inspections. The VA has not done its own compliance inspections of new construction since 2006, so local building inspections matter.
- Lender requirements. Some lenders, especially for one-time close construction loans, have their own builder standards, so ask yours.
Since the VA no longer steps in to settle disputes with builders, it is smart to hire your own licensed inspector before closing. For loans with a Notice of Value issued before the change, the VA continues to handle complaints within the one-year warranty period. Our guide to VA Builder ID changes has more.
Two VA Loans at Once
In most cases you can only have one VA loan at a time, but there are exceptions. If you have entitlement left over, you may be able to buy a second home while keeping the first, for example after a permanent change of station (PCS) move. This is called second-tier entitlement. Read the details in our guide to VA second-tier entitlement. If you are buying with someone else, see our guide to joint VA loans.
Refinancing a VA Mortgage
If you already have a VA loan, you have two main refinance options:
- IRRRL (Interest Rate Reduction Refinance Loan): A streamlined refinance for an existing VA loan. In most cases it needs no new appraisal and no credit underwriting. The new rate must generally be lower than your current rate, unless you are switching from an adjustable rate to a fixed rate. You can roll in the 0.5% funding fee and closing costs, but you cannot take cash out. See our VA streamline refinance page.
- VA cash-out refinance: Lets you borrow against your home’s equity, up to 100% of its VA value, and it also lets you refinance a non-VA loan into a VA loan. It requires an appraisal and full underwriting. See our VA refinance page.
Your Next Steps
Ready to start your VA loan? Here is a simple order to follow:
- Get your Certificate of Eligibility. Your lender can pull it online, or you can request it from the VA.
- Check your credit and your budget. Know what your payment would look like, using our VA pros and cons guide and a lender’s estimate.
- Get pre-approved. A VA-approved lender will review your income, residual income, and credit.
- Shop for a home that fits the rules. Keep the property requirements, condo approval, and the 60-day move-in in mind.
- Plan for the funding fee. Decide whether to finance it or pay it at closing, and ask whether you are exempt.
VA Loan Guidelines FAQ
Here are answers to the questions veterans ask us most about VA loan guidelines.
Do I need a down payment for a VA loan?
No. With full entitlement, you can buy with no down payment. You can still choose to put money down, which lowers your funding fee. If you are using remaining entitlement on a second VA loan, you may need a down payment on part of the loan.
What credit score do I need for a VA loan?
The VA has no minimum credit score. Many lenders set their own minimums, so shop around if you have been turned down. The VA looks at your income, residual income, and credit history as a whole.
Is there a limit on how much I can borrow with a VA loan?
Not for veterans with full entitlement. The cap was removed effective January 1, 2020. Your lender decides how much you can borrow based on your income and credit. If you have partial entitlement, your county’s loan limit ($832,750 for a one-unit home in most areas in 2026) affects how much you can borrow with no down payment.
Do VA loans have mortgage insurance?
No monthly mortgage insurance. You pay a one-time funding fee that you can finance into the loan, and you may be exempt from it if you receive VA disability compensation.
How soon do I have to move into the home?
Generally within 60 days of closing. The VA allows a later date in certain cases, such as repairs, a deployment, or a scheduled retirement, but generally not beyond 12 months.
Can I use a VA loan to buy a new construction home?
Yes. As of March 31, 2025, the builder no longer needs a VA Builder ID for most VA loans. The home still needs a VA appraisal, must meet the Minimum Property Requirements, and must come with a builder warranty.
Can I buy a condo with a VA loan?
Yes, if the condo project is on the VA’s approved list. The VA does not approve single units on their own, so check the building first.
Can I use a VA loan for an investment property?
No. VA loans are for a home you will live in. You can buy a home with up to four units as long as you occupy one of them.
Can I use my VA loan benefit more than once?
Yes. You can use it again once you have repaid the first VA loan and sold the home. You can also have your entitlement restored in other situations, such as when a qualified buyer assumes your loan and substitutes their entitlement. A later use of the benefit carries a higher funding fee if you put less than 5% down.
Can I have two VA loans at the same time?
In some cases, yes. If you have enough remaining entitlement, you may be able to buy another primary home while you still have your first VA loan, such as after a PCS move. Our second-tier entitlement guide explains how.
Ready to Use Your VA Benefit?
Tell us about your service and the home you have in mind, and we will check your eligibility, run your numbers, and show you what a VA loan looks like for you. Apply online or call 262-305-0680. You can also read about the benefits of a VA loan or see how VA compares in our guide to FHA, VA, and USDA loans.
Important Disclosures:
VA Loan Example (0% down, 30-year fixed rate): $300,000 sales price, $0 down payment, $306,450 loan amount (includes $6,450 first-time use VA Funding Fee), 7.625% interest rate, 7.744% Annual Percentage Rate, $2,169 principal and interest payment.
VA Loan Example (5% down, 30-year fixed rate): $300,000 sales price, $15,000 down payment, $289,275 loan amount (includes $4,275 first-time use VA Funding Fee), 7.625% interest rate, 7.751% Annual Percentage Rate, $2,047 principal and interest payment.
VA Loan Example (10% down, 30-year fixed rate): $300,000 sales price, $30,000 down payment, $273,375 loan amount (includes $3,375 first-time use VA Funding Fee), 7.625% interest rate, 7.758% Annual Percentage Rate, $1,935 principal and interest payment.
Taxes, insurance, and mortgage insurance will be part of the total monthly mortgage payment but are not included in the above examples. These examples are for illustrative purposes only and may differ from the current interest rate offered. Call for the current rate and full disclosure of current terms.
Union Home Mortgage is not acting on behalf of or at the direction of VA or the Federal Government. These materials are not from VA and were not approved by VA or a government agency.
VA funding fee rates are federally mandated and subject to change. Individual exemption eligibility is determined under Federal guidelines. Funding fee amounts in this article reflect rates in effect for loans closing in 2026. Verify your specific rate, fee tier and exemption status using your Certificate of Eligibility and a licensed approved lender.
The information provided here is for informational purposes. When interest rates and loan program information are included, it is for illustration purposes only and not a solicitation or quote for services. This is not an advertisement or loan estimate. Current interest rates, loan programs and qualification criteria can change at any time. If you have questions or need assistance, we can be reached using the contact information above.
Union Home Mortgage Corp. does not provide tax, legal, credit repair, or accounting services. The information provided is generally true but may not apply to you or your situation. For tax or legal advice please consult an appropriate professional in one of these fields.
Additional Helpful Mortgage Resources:
The VA mortgage has a lot of moving parts. Knowing each step of the process and what to expect can make the home buying process so much better. Jeff Nelson has a great article explaining what you need to know about loans for Veterans and the steps to expect while you go through your home buying journey.
There are many benefits of a VA mortgage, as Bill Gassett details in his blog post on the topic. From no down payment options to no private mortgage insurance, Bill’s article articulates the many benefits of VA mortgages.
There are a ton of reasons to apply for this loan. The pros outweigh the cons, but there are certain circumstances where a VA mortgage is not for you. Take a look at this post to learn the pros and cons of a Veteran mortgages.
The VA mortgage is one of only a few mortgage programs that have a no down payment option. Kyle Hiscock has an informative article about the pros and cons of low down payment programs that will help you make an informed decision on whether or not it is a good idea for you.
Requirements for a VA Loan Every Veteran Should Know
About the author: This article on “VA Home Loan Benefits Every Veteran Should Know” was written by Luke Skar of MadisonMortgageGuys.com. As the Social Media Strategist, his role is to provide original content for all of their social media profiles and generate new leads from his website.
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