VA Purchase Loan: A Homebuying Option for Eligible Veterans

We work closely with eligible homebuyers to explain program benefits, review eligibility, and structure loan options that may support long-term financial goals. This overview provides a detailed breakdown of how VA Purchase Loans work, who may qualify, and what to expect throughout the process.

What Is a VA Purchase Loan?

A VA Purchase Loan is a mortgage program designed specifically for eligible Veterans, service members, and surviving spouses purchasing a primary residence. The loan is issued by approved mortgage lenders and backed by a partial guarantee from the Department of Veterans Affairs. This guarantee reduces lender risk, which often allows us to offer more flexible guidelines and competitive interest rates.

Unlike some other government-backed programs, VA loans do not require a down payment in many situations, and there is no monthly mortgage insurance. This structure may help borrowers achieve homeownership with lower upfront costs and potentially lower monthly payments.

Key Benefits of VA Purchase Loans

No Down Payment in Many Situations

Most eligible borrowers may purchase a home with 0% down, depending on income, credit, entitlement, and property factors. This allows many Veterans to retain savings for emergencies, home improvements, or future goals.

No Monthly Mortgage Insurance

Conventional loans typically require private mortgage insurance (PMI) when the down payment is below 20%. FHA loans include monthly mortgage insurance as well. VA loans are unique because they do not include monthly mortgage insurance, which may help reduce the overall monthly payment.

Competitive Interest Rates

The VA guarantee often allows lenders to offer interest rates that may be more favorable when compared to other loan types. Lower interest rates may improve buying power and reduce long-term interest costs.

Flexible Credit and Qualification Standards

Because of the VA backing, the approval process may be more flexible than conventional underwriting. This can be helpful for borrowers rebuilding credit or those with limited credit history.

Limits on Buyer Closing Costs

The VA restricts certain types of fees that Veterans are allowed to pay, helping keep closing expenses more manageable. Sellers may also contribute toward approved closing costs, reducing out-of-pocket expenses.

Reusable Benefit

The VA home loan benefit is not a one-time event. Borrowers may use it multiple times as long as eligibility and entitlement are available. In some cases, entitlement may also be restored after selling or paying off a previous VA-financed home.

Who Is Eligible for a VA Purchase Loan?

VA eligibility is based on service history, duty status, length of service, and discharge conditions. Borrowers typically qualify under one of the following categories:

• Completed 90 consecutive days of active service during wartime
• Completed 181 days of active service during peacetime
• Served 6 years or more in the National Guard or Reserves
• Are an unremarried surviving spouse of a Veteran who died in service or from a service-connected disability

Eligible borrowers must obtain a Certificate of Eligibility (COE). We help with retrieving the COE directly through the VA portal, which simplifies the process for most applicants.

Property Requirements for VA Purchase Loans

The VA loan must be used for a primary residence. Investment properties and vacation homes are not eligible. The home must also meet VA Minimum Property Requirements (MPRs), which ensure:

• The property is safe to occupy
• The structure is sound
• The home is sanitary and functional

Common property types eligible for VA purchase financing include:

• Single-family homes
• VA-approved condominiums
• Townhomes
• Manufactured homes on a permanent foundation (subject to lender approval)
• Multi-unit properties (up to four units, with one unit occupied by the Veteran)

Understanding the VA Funding Fee

Most VA loans require a one-time VA funding fee. This fee helps support the long-term sustainability of the VA loan program and allows it to remain available for future Veterans. The funding fee may vary based on factors such as:

• Whether this is the first or a subsequent use of VA loan benefits
• The down payment amount (if any)
• The type of military service

Borrowers receiving VA disability compensation may be exempt from this fee. For borrowers required to pay it, the fee may be included in the loan amount.

The VA Loan Process

The VA loan process is designed to support eligible borrowers through a structured and transparent path to homeownership. Here is what buyers may expect when working with our mortgage team:

1. Prequalification

We review income, credit, assets, and service history to help estimate buying power and determine whether a VA loan may be an appropriate option.

2. Certificate of Eligibility (COE)

We request your COE electronically through the VA portal and verify your available entitlement.

3. Home Shopping

You work with a real estate agent to find a property that aligns with your budget and meets VA requirements.

4. Loan Application

Once under contract, you complete the full loan application and provide documentation confirming income, assets, and service eligibility.

5. VA Appraisal

A VA-approved appraiser evaluates the property to ensure its value and confirm that the home meets all MPR guidelines.

6. Underwriting Review

The underwriting team reviews your complete file to verify that the loan meets VA and lender standards. Additional documentation may be requested as needed.

7. Closing

Once the loan receives final approval, closing documents are prepared and signed. After closing, you receive the keys to your new home.