What You Need to Know About VA Home Purchase Loans

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You can’t do a VA streamline refinance if your existing mortgage is not a VA loan. VA home purchase loans are 100% financing, 0% down payment, and 0% mortgage insurance mortgages. These mortgages are made especially for eligible veterans, servicemembers, and their families with the backing of the VA.


VA Home Purchase Loans


Before we elaborate on the advantages VA home purchase loans bring, let’s understand how they can be used and what they require of future borrowers like you. They are for buying single-family homes and for the following:

  • Building a home
  • Purchasing and improving a home FHA’s 203k loan
  • Adding energy-efficient features to a home
  • Buying a manufactured home and/or lot


The home subject to the mortgage must be a principal residence, i.e. the veteran and/or his/her family should occupy the home. This is a primary requirement in any VA home purchase loan.

As to the borrower, he or she must obtain a Certificate of Eligibility or COE to qualify for a VA home loan. The VA sets the eligibility requirements such as minimum service requirements applicable to veterans, those currently on active duty, and National Guard and Reserve members.

Their spouses and eligible beneficiaries can also apply subject to meeting a separate set of VA eligibility requirements.

Find a loan that fits your financing needs.

The VA Home Loan Advantage

Now, VA home purchase loans are packed with features that make them affordable and popular among homebuyers:

  1. They are not just for first-time homebuyers. Repeat or seasoned homebuyers can apply for a VA-backed purchase loan.
  2. They are zero-downpayment loans. For as long as the sales tag of the home does not exceed its appraised value, the down payment can go as low as zero.
  3. They don’t require a private mortgage insurance (PMI), a dreaded expense when your down payment is below 20% on conventional loans.
  4. They allow for reuse of entitlement. When you take out a VA loan, you are using an entitlement that allows your loan to be backed by the VA. This entitlement can be reused when you take out another purchase or refinance loan.
  5. They don’t have prepayment penalties. You won’t be slapped with a fee if you pay off your VA loan early.
  6. They have closing costs limit. The VA allows for certain fees and charges that will be added to the closing costs up to a certain extent. The seller is permitted to pay certain costs on the behalf of the borrower by way of concessions.
    They can be assumable by qualified borrowers.
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