What Is a VA Loan?

A VA home loan is a mortgage loan that is guaranteed by the U.S. Department of Veterans Affairs (VA). The loan is available to eligible veterans, service members, and surviving spouses.

The VA does not directly originate or fund the loans, but it does guarantee a portion of the loan, which protects the lender against loss if the borrower defaults. As a result, VA home loans typically offer more favorable terms than conventional mortgages  making them a good option for eligible borrowers.

Pros 

• No down payment required
• No Private Mortgage Insurance (PMI) 
• More flexible credit requirements
• Lower rates 
• VA home loans typically offer more favorable terms than conventional mortgages, making them a good option for eligible borrowers

Cons

• Only eligible to veterans, service members, and surviving spouses
• There's a funding fee
• VA loans have property restrictions.
• The loan can't be used for vacation or rental properties and can only be used to purchase or refinance owner-occupied properties. 
• The seller may not take the loan if you go with a VA loan since the seller has to pay closing costs, VA appraisals are required, and government paperwork can delay the closing process). 
  
  

who is eligible for a va home loan? 

VA home loans are available to qualifying veterans, active-duty service members, reservists, National Guard members, and certain surviving spouses who meet the Department of Veterans Affairs’ service requirements. Eligibility is determined by military service history and requires a Certificate of Eligibility.