A VA loan is a mortgage backed by the U.S. Department of Veterans Affairs. It offers no down payment, no PMI, and favorable terms for veterans, active-duty service members, and some surviving spouses.
Key Characteristics
Available to eligible veterans and military members
No down payment required
No private mortgage insurance (PMI)
Backed by the VA but issued by private lenders
Loan Types
Purchase Loan
Used to buy a home with no down payment.
Must be for primary residence
Interest Rate Reduction Refinance Loan (IRRRL)
Streamlined refinance option for current VA borrowers.
Requires previous VA loan
Credit Score Requirements
Minimum Score:
580
Recommended: 620+ for better lender terms
PMI Impact: PMI not required for any VA loan
Down Payment Options
Minimum: 0% down for most eligible borrowers
Typical Range: 0%–5% optional
No PMI Threshold: No PMI regardless of down payment
Private Mortgage Insurance (PMI)
Required If: Never required
Cancellation Point: N/A
Cost Factors: None, but funding fee may apply
Debt-to-Income Ratio
Typical Maximum: 41%–50% with residual income consideration
Flexible due to VA residual income guidelines
Documentation Requirements
Certificate of Eligibility (COE)
Proof of income
Military service documentation
Loan Terms
Common Terms:
15 years, 30 years
Rate Types: Fixed-rate , Adjustable-rate
Best For
Veterans and active-duty military
Borrowers with limited savings
Buyers seeking no PMI and low rates
Pros
No down payment required
No PMI
Competitive interest rates
Cons
Restricted to eligible military borrowers
VA funding fee applies (unless exempt)
Only for primary residences
Summary
VA loans provide unmatched benefits for eligible military borrowers, including zero down and no PMI. They offer strong affordability but are limited in eligibility and usage.