For many veterans and active-duty service members, VA loans are one of the most valuable benefits of military service. Backed by the U.S. Department of Veterans Affairs, these loans make homeownership more attainable through lower upfront costs, no private mortgage insurance, and flexible credit requirements.
With Veterans Day right around the corner, it’s a good time to highlight this powerful program and understand how it works. In this Redfin guide, we’ll explain who qualifies, what the main benefits are, and how to make the most of your VA loan when buying or refinancing a home.
What is a VA loan?
A VA loan is a type of mortgage guaranteed by the U.S. Department of Veterans Affairs. It’s designed to help eligible service members, veterans, and surviving spouses buy or refinance a home with favorable loan terms, often with no down payment required.
While the VA doesn’t lend money directly (except in rare cases), it guarantees a portion of the loan. This means if a borrower defaults, the VA will cover part of the lender’s loss. Because of this guarantee, lenders can offer competitive interest rates and flexible qualification standards.
Why the VA loan program exists
The VA loan program was established in 1944 as part of the original GI Bill, designed to help service members transition to civilian life and build financial stability. Since then, it has helped more than 28 million veterans and their families buy, build, or refinance homes.
VA loans in today’s market
According to a recent Redfin report, VA loans have become slightly more common as the housing market tilts in buyers’ favor and sellers grow more open to offers with lower down payments. Nationwide, 7.3% of mortgaged homebuyers used a VA loan in August 2025, up from 6.5% a year earlier—the highest share for that month since 2019.
These loans are most prevalent in communities with a strong military presence. In Virginia Beach, VA, more than 43% of mortgaged buyers used a VA loan in August—the highest share of any major U.S. metro and the largest on record for the area. Jacksonville, FL (17%), Washington, D.C. (17%), San Diego, CA (15%), and Las Vegas, NV (12%) also rank among the top markets for VA financing. VA loans are most common in those places because they each have a large military presence.
Who qualifies for a VA loan?
You may be eligible for a VA loan if you meet at least one of the following:
Service members & veterans
- 90 consecutive days of active service during wartime, or
- 181 days of active service during peacetime, or
- 6+ years in the National Guard or Reserves.
Surviving spouses
Unremarried surviving spouses of veterans who died in service or from a service-connected disability may also qualify.
Certificate of Eligibility (COE)
You’ll need a COE from the VA to prove eligibility. Most lenders can help you request this online, or you can apply through the VA’s eBenefits portal.
Tip: Even if you’ve used your VA loan benefit before, you may still qualify again through restoration of entitlement.
Types of VA loans
Not every VA loan is for buying a home – some are designed to help you refinance, renovate, or even tap into your home’s equity. No matter your financial situation or goals, here’s a look at the main types of VA loans and what each offers.
Your lender can help you decide which VA loan type fits your financial goals.
| Type of VA Loan | Purpose | Key Features |
| VA Purchase Loan | Buy a primary residence | No down payment required in most cases, no PMI, competitive rates. |
| VA Cash-Out Refinance | Refinance your current mortgage and tap into home equity | Access up to 90% of your home’s value as cash, can be used to refinance non-VA loans. |
| VA Interest Rate Reduction Refinance Loan (IRRRL) | Refinance an existing VA loan to lower your interest rate | Streamlined process with minimal documentation; often no appraisal or income check required. |
| VA Jumbo Loan | Buy a more expensive home that exceeds conforming loan limits | No formal VA loan limit if you have full entitlement; lender standards may vary. |
| Native American Direct Loan (NADL) | Buy, build, or improve a home on Federal Trust Land | Offered directly by the VA (not private lenders); available to eligible Native American veterans. |
| VA Renovation Loan (less common) | Buy or refinance and fund repairs or improvements | Combines purchase/refinance with renovation costs into one VA-backed loan. |
VA loan limits
The VA doesn’t cap how much you can borrow, unless you have impacted entitlement, meaning part of your VA benefit is already being used on another loan or wasn’t fully restored.
When loan limits do apply, they’re typically based on the conventional loan limit, which for 2025 is $806,500 for one-unit properties in most areas of the U.S. Lenders also use these conventional limits as the starting point for VA jumbo loans.
Some high-cost areas have higher limits, giving qualified borrowers more flexibility. And if you need to borrow more than your local limit allows, you may still qualify for a VA jumbo loan, which doesn’t require a down payment and can offer a lower rate than a traditional jumbo loan.
VA loan benefits
VA loans offer several advantages that make them especially appealing:
- No down payment required in most cases
- No private mortgage insurance (PMI)
- Lower average interest rates compared to conventional loans
- Flexible credit and income standards
- Streamlined refinance options through VA IRRRL (Interest Rate Reduction Refinance Loan)
- Assumable loans, meaning a qualified buyer can take over your VA loan
For example, on a $400,000 home, a conventional loan with 5% down would require $20,000 upfront – plus PMI. With a VA loan, you could pay $0 down and skip PMI entirely, saving thousands in the first year alone.
VA loan requirements
While VA loans are known for being flexible, you’ll still need to meet a few key requirements:
- Credit and income: The VA sets general guidelines, but lenders establish their own standards. Most look for a credit score of 620 or higher, though some may approve lower scores with strong financials.
- Property: The home must be your primary residence and meet the VA’s Minimum Property Requirements (MPRs).
- Funding fee: Most borrowers pay a VA funding fee, which ranges from 1.25% to 3.3% of the loan amount depending on service history and down payment. Some veterans are exempt (e.g., those with service-connected disabilities).
- Residual income: Lenders evaluate whether you have enough income left over after monthly expenses, a unique VA requirement to help prevent foreclosure.
Want to estimate your monthly VA loan payments? Use our mortgage calculator to see how your loan amount, interest rate, and term affect your payment.
Can you use your VA loan benefit more than once?
Yes, you can use your VA loan benefit multiple times. You can restore your full entitlement by selling your current home, or you can use partial entitlement to buy another property if you keep your first one. This flexibility is especially valuable for military families who relocate frequently.
VA loans vs. other mortgage types
Here’s how VA loans compare to conventional and FHA loans at a glance:
| Feature | VA Loan | Conventional | FHA |
| Down payment | 0% (most cases) | 3%+ | 3.5%+ |
| PMI / MIP | No PMI | Required if <20% down | Required |
| Credit score | Flexible | Typically 620+ | 580+ |
| Funding fee | Yes, 1.25–3.3% | No | Upfront MIP (1.75%) + annual |
| Assumable | Yes | Rare | Yes |
VA loans typically offer the best terms for those who qualify, especially when compared to conventional or FHA loans.
>>Read: Types of Home Loans
The VA loan process: Step-by-step guide
The VA loan process is similar to a conventional mortgage, with a few key differences along the way. Here’s a quick overview of the VA loan process:
| Step | What Happens | Key Details |
| 1. Check eligibility | Confirm your service history and get a COE. | You can apply online or have your lender request it. |
| 2. Find a VA-approved lender | Work with a bank, credit union, or mortgage company. | The VA doesn’t lend directly (except for Native American Direct Loans). |
| 3. Get preapproved | Lender reviews credit, income, and entitlement. | This helps you set a budget and strengthen offers. |
| 4. House hunt | Shop for a home within your preapproval amount. | The home must be your primary residence. |
| 5. VA appraisal | The VA requires a special appraisal. | Ensures the property meets VA minimum property requirements (MPRs). |
| 6. Underwriting | Lender verifies documents and finalizes the loan. | May ask for additional info before closing. |
| 7. Closing | You sign final documents and get the keys. | You may pay a one-time VA funding fee (can be rolled into the loan). |
>>Read: How to Buy a Foreclosed Home With a VA Loan
When a VA loan might not be right
VA loans are a great option for many veterans and service members, but they’re not ideal for every situation. You may want to consider another loan type if:
- You’re buying a vacation or investment property: VA loans are only for primary residences. For a second home or rental, you’ll need a conventional loan.
- The home doesn’t meet VA property standards: Homes must meet the VA’s safety and livability requirements. A fixer-upper may not qualify unless it’s financed with a VA renovation loan.
- The funding fee may offset your savings: As noted earlier, most borrowers pay a one-time VA funding fee. For smaller loan amounts or when making a large down payment, that fee can reduce some of the loan’s financial advantages.
Even if a VA loan isn’t the right fit now, you may still qualify in the future. For example, if a fixer-upper doesn’t meet VA standards today, you could use a VA renovation loan once repairs are complete.
Frequently asked questions about VA loans
1. Can I use a VA loan for a second home or investment property?
No. VA loans are only for primary residences, though you can reuse your benefit for a new primary home.
2. Are VA loans only for first-time buyers?
No. You can use the benefit multiple times as long as you have remaining entitlement.
3. Can I get a VA loan with bad credit?
Possibly. The VA doesn’t set a minimum score, but most lenders look for around 620. Some may approve lower with strong compensating factors.
4. How long does it take to close on a VA loan?
On average, 30–45 days, similar to conventional loans, though the VA appraisal can add a bit of time.
5. Do I need mortgage insurance with a VA loan?
No. Instead of PMI, you’ll typically pay a one-time funding fee, which can be financed.