VA Loans 2026: Complete Guide for Veterans

VA loans represent one of the most valuable benefits available to veterans, active-duty service members, and eligible surviving spouses. Backed by the U.S. Department of Veterans Affairs, these mortgages offer significant advantages including no down payment requirement, competitive interest rates, and no private mortgage insurance. Understanding how VA loans work can save you tens of thousands of dollars over the life of your mortgage.

This comprehensive guide covers everything you need to know about VA loans in 2026, from eligibility requirements to the application process, helping you make the most of this earned benefit.

What is a VA Loan?

A VA loan is a mortgage guaranteed by the U.S. Department of Veterans Affairs, available to veterans, active-duty service members, National Guard members, Reservists, and certain surviving spouses. The VA doesn't lend money directly - instead, it guarantees a portion of loans made by private lenders, reducing their risk and enabling better terms for borrowers.

Key characteristics of VA loans include:

• No down payment required - Purchase a home with 0% down in most cases
• No PMI - Unlike conventional loans, no private mortgage insurance required
• Competitive rates - Typically 0.25-0.5% lower than conventional mortgages
• Limited closing costs - VA limits what lenders can charge
• No prepayment penalties - Pay off your loan early without fees
• Assumable loans - Future buyers can take over your VA loan
• Lifetime benefit - Use your VA loan benefit multiple times

VA Loan Eligibility Requirements

To qualify for a VA loan, you must meet service requirements and obtain a Certificate of Eligibility (COE). Eligibility extends to:

Veterans

• 90 consecutive days of active service during wartime
• 181 consecutive days of active service during peacetime
• 6 years in the National Guard or Reserves
• Discharge under conditions other than dishonorable

Active-Duty Service Members

• Currently serving with at least 90 continuous days
• Statement of service required from commanding officer

National Guard and Reserve Members

• 6 years of service in the Selected Reserve or National Guard
• Or 90 days of active-duty service (Title 10 orders)

Surviving Spouses

• Unremarried spouse of veteran who died in service or from service-connected disability
• Spouse of service member missing in action or prisoner of war for 90+ days
• Remarried spouse (if remarriage occurred after age 57 and after December 16, 2003)

VA Loan Limits and Funding Fee

Loan Limits

For veterans with full entitlement, there's no VA loan limit - you can borrow as much as a lender will approve without a down payment. For those with reduced entitlement (previous VA loan not fully repaid), county loan limits apply, based on conforming loan limits set by the Federal Housing Finance Agency.

VA Funding Fee

The VA funding fee helps sustain the program and varies based on loan type, down payment, and whether you've used VA loan benefits before:

• First-time use, no down payment: 2.15% of loan amount
• First-time use, 5% down: 1.5% of loan amount
• First-time use, 10%+ down: 1.25% of loan amount
• Subsequent use, no down payment: 3.3% of loan amount

Veterans receiving VA disability compensation and surviving spouses are exempt from the funding fee.

Types of VA Loans

VA Purchase Loan

The most common type, used to buy a primary residence. Can finance single-family homes, condos (VA-approved), manufactured homes, and multi-unit properties (up to 4 units if you occupy one).

VA Cash-Out Refinance

Refinance your existing mortgage (VA or non-VA) and take cash out of your home's equity. Can borrow up to 100% of home's appraised value in most cases.

VA Interest Rate Reduction Refinance Loan (IRRRL)

Also called a VA Streamline Refinance, this allows you to refinance an existing VA loan to a lower interest rate with minimal documentation and often no appraisal required.

VA Native American Direct Loan (NADL)

Direct loans from the VA for eligible Native American veterans to purchase, build, or improve homes on Federal Trust Land.

VA Loan Process Step by Step

1. Obtain Your Certificate of Eligibility (COE)

Your COE proves to lenders you meet VA eligibility requirements. Obtain it through:

• VA's eBenefits portal (fastest method)
• Through your lender (many can retrieve it electronically)
• By mail using VA Form 26-1880

2. Get Pre-Approved

Work with a VA-approved lender to review your finances and determine how much you can borrow. Pre-approval strengthens your offer when buying.

3. Find a Home

Work with a real estate agent familiar with VA loans. The property must be your primary residence and meet VA Minimum Property Requirements (MPRs).

4. VA Appraisal

A VA-assigned appraiser evaluates the property's value and ensures it meets MPRs. The appraisal protects you from overpaying and ensures the home is safe and sanitary.

5. Underwriting and Closing

The lender verifies all documentation, and if approved, you'll close on the loan. VA loans typically close in 30-45 days.

VA Loan Credit Requirements

The VA doesn't set a minimum credit score, but most lenders require:

• Credit score: 620 minimum (some lenders accept 580)
• Debt-to-income ratio: Generally 41% or less, though higher ratios possible with compensating factors
• Residual income: VA requires sufficient monthly income after expenses (varies by region and family size)
• Stable employment: Generally 2 years of steady employment history

VA Loan vs. Conventional Mortgage

• Down payment: VA: 0% | Conventional: 3-20%
• PMI: VA: None | Conventional: Required under 20% down
• Credit requirements: VA: More flexible | Conventional: Generally stricter
• Interest rates: VA: Typically lower | Conventional: Market rates
• Closing costs: VA: Limited by regulation | Conventional: No limits
• Funding fee: VA: Yes (unless exempt) | Conventional: None

Common VA Loan Myths

Myth: VA loans take longer to close

Reality: VA loans close in similar timeframes as conventional loans (30-45 days). The VA appraisal adds minimal time.

Myth: You can only use a VA loan once

Reality: VA loan entitlement can be used multiple times. You can even have two VA loans simultaneously in certain situations.

Myth: Sellers don't like VA loan offers

Reality: VA buyers are often well-qualified, and offers shouldn't be dismissed. The VA appraisal protects the transaction.

Tips for Getting the Best VA Loan

• Compare multiple lenders - Rates and fees vary significantly between VA lenders
• Improve your credit - Higher scores mean better rates even with VA loans
• Consider a down payment - Even 5% down significantly reduces your funding fee
• Get rate quotes on the same day - For accurate comparison shopping
• Work with VA-experienced professionals - Lenders and agents familiar with VA loans streamline the process
• Review your COE for entitlement - Ensure you have full entitlement for maximum benefits

Frequently Asked Questions

Can I use a VA loan for a second home or investment property?

No, VA loans are for primary residences only. However, you can use a VA loan to buy a multi-unit property (up to 4 units) if you live in one unit.

What happens to my VA loan if I get divorced?

The veteran's entitlement remains tied to the loan until it's paid off or refinanced. If your spouse keeps the home with your VA loan, your entitlement stays committed until they refinance into a different loan type.

Can I get a VA loan with a bankruptcy or foreclosure?

Yes, after waiting periods. Generally, 2 years after bankruptcy discharge and 2 years after foreclosure, though some lenders may have stricter requirements.