VA Loans

Clifton Arrington LO > Services > Mortgage > VA Loans

VA Loans:

A VA loan is a mortgage benefit for veterans, service members, and surviving spouses, backed by the Department of Veterans Affairs (VA) and issued by private lenders. It allows for no down payment, no private mortgage insurance (PMI), and competitive interest rates, usually for purchasing or refinancing a primary residence. 

Key Features and Benefits

  • No Down Payment: Generally, no down payment is required for homes up to $144,000, and for higher amounts, the VA guarantees 25% of the loan, often removing the need for a down payment entirely.
  • No Private Mortgage Insurance (PMI): Because the VA guarantees part of the loan, borrowers do not pay monthly PMI, saving thousands over the life of the loan.
  • Limited Closing Costs: The VA restricts the fees and closing costs that lenders can charge, and in some cases, these costs can be paid by the seller.
  • Reusable Benefit: The loan is a lifetime benefit that can be used multiple times. 

How the Process Works

  • Obtain Certificate of Eligibility (COE): Applicants must prove eligibility, which can often be pulled instantly by lenders or obtained via the VA website with a DD214.
  • Find a Lender: VA loans are provided by private banks, mortgage companies, or lenders, not the VA directly.
  • Property Requirements: The home must meet VA minimum property requirements, and a VA appraisal is required to ensure the home’s value matches the loan amount.
  • Funding Fee: A one-time “VA funding fee” is generally required to reduce the cost to taxpayers, which can be paid upfront or rolled into the loan amount. This fee is waived for veterans with service-connected disabilities. 

Eligibility

  • Active duty service members (usually 90 days of service).
  • Veterans with active service.
  • Surviving spouses who have not remarried. 

Usage

  • Buy a home or manufactured home.
  • Build, repair, or improve a home.
  • Refinance an existing loan

Frequently Asked Questions

Find answers to common questions below

A1: A VA loan is a mortgage benefit for veterans, service members, and surviving spouses, backed by the Department of Veterans Affairs and issued by private lenders. It is designed to help these individuals purchase or refinance a primary residence with favorable terms.
A2: VA loans offer several benefits including no down payment requirement for homes up to $144,000, no private mortgage insurance (PMI), and competitive interest rates. These features make it an attractive option for eligible borrowers.
A3: Generally, VA loans do not require a down payment for homes up to $144,000. For higher amounts, the VA guarantees 25% of the loan, which often eliminates the need for a down payment entirely.
A4: No, private mortgage insurance (PMI) is not required for VA loans because the VA guarantees part of the loan, which can save borrowers thousands over the life of the loan.
A5: VA loans are available to veterans, active service members, and surviving spouses who meet the eligibility requirements set by the Department of Veterans Affairs.