Last updated: October 5, 2026 · The interest rate in the example is an illustration, not a quote.
VA home loans are one of the most valuable benefits available to service members, veterans and eligible surviving spouses. They are made by private lenders and guaranteed by the U.S. Department of Veterans Affairs, which lets lenders offer no-down-payment loans without monthly mortgage insurance.
Key features
- No down payment for eligible borrowers with full entitlement.
- No monthly mortgage insurance, unlike FHA loans and conventional loans with less than 20% down.
- A one-time funding fee, which can be financed into the loan, unless you are exempt.
- Limits on closing costs that lenders can charge veterans.
- Primary residence only.
Who is eligible
Eligibility depends on length and type of service, or on surviving spouse status. You prove eligibility with a Certificate of Eligibility (COE), which many lenders can request for you online. Lenders also check credit, income and debts; see debt-to-income ratio explained.
The VA funding fee
| Down payment (purchase) | First use | Subsequent use |
|---|---|---|
| Less than 5% | 2.15% | 3.3% |
| 5% or more | 1.5% | 1.5% |
| 10% or more | 1.25% | 1.25% |
You do not pay the fee if you receive VA compensation for a service-connected disability, are a surviving spouse receiving Dependency and Indemnity Compensation, or meet other exemptions listed by the VA.
Example: a $350,000 home with no money down
With first-time use and 0% down, the funding fee is 2.15%, or $7,525. Financed into the loan, the total is $357,525. At an example rate of 6.5% for 30 years, the principal-and-interest payment is $2,259.80, with no monthly mortgage insurance. For comparison, an FHA loan on the same home with 3.5% down at the same example rate would cost $2,172.17 plus about $157.51 a month of mortgage insurance, and it requires $12,250 down. See FHA vs. conventional.
Things to know
- You still need cash for some closing costs, though sellers can contribute.
- The home must pass a VA appraisal, which also checks minimum property requirements. See home appraisals explained.
- You can use the benefit more than once, and entitlement can often be restored after you sell.
- VA loans can be assumed by qualified buyers.
Estimate your payment in our mortgage calculator by entering the loan including the funding fee and setting the down payment to zero.
Frequently asked questions
Do VA loans require a down payment?
No down payment is required for eligible borrowers with full entitlement, as long as the sales price does not exceed the appraised value. Lenders may still have their own requirements.
How much is the VA funding fee?
For a purchase, first-time use with less than 5% down costs 2.15% of the loan; subsequent use costs 3.3%. Putting 5% down lowers it to 1.5%, and 10% down to 1.25%. Veterans receiving VA disability compensation and certain others are exempt.
Do VA loans have mortgage insurance?
No. VA loans do not charge monthly mortgage insurance, which is one of their biggest advantages over FHA and low-down-payment conventional loans.
Is there a VA loan limit?
Borrowers with full entitlement have no VA loan limit, although lenders still check income and credit. Borrowers with reduced entitlement may face limits based on the county conforming loan limit.
Sources: VA: Funding fee and closing costs; VA home loans. Example calculations by ToolStackIA.
This article is for educational purposes only and is not financial advice. Loan programs, rates and rules change; confirm details with your lender or a HUD-approved housing counselor.