Earned, not given. Here’s how to use the benefit well.

Who may be eligible

Eligibility depends on length and character of service. In broad terms: veterans with sufficient active-duty service, current service members, six or more years in the Selected Reserve or National Guard (or 90 days of active service under certain orders), and surviving spouses of veterans who died in service or from a service-connected disability. The VA documents it with a Certificate of Eligibility, which Jared can usually pull electronically.

Entitlement matters. With full entitlement there is no VA-imposed loan limit; with partial entitlement (an existing VA loan or a past VA loss) the county conforming limit affects how much you can borrow without a down payment.

How it works

The VA guarantees a portion of the loan, which is why lenders can forgo a down payment and monthly mortgage insurance. In place of MI there is a one-time funding fee: 2.15% for first use with no down payment, 3.3% for subsequent use, lower with 5% or 10% down, and typically waived for veterans receiving service-connected disability compensation and certain surviving spouses. It can be financed.

Underwriting uses a debt-to-income guideline of 41% as a benchmark but relies heavily on residual income: what’s left after major obligations, by family size and region. Strong residual income can support higher ratios.

The VA appraisal includes Minimum Property Requirements for safety and livability, and a Notice of Value. The property must be your primary residence.

What it may help solve

• Buying without a down payment and without the long-run cost of mortgage insurance
• Qualifying with a lower credit score than many jumbo or conventional programs would allow
• Lowering the rate on an existing VA loan with minimal paperwork (Interest Rate Reduction Refinance Loan)
• Refinancing to access equity, up to 100% of value under VA rules, though most lenders cap it at 90% Jared’s lender cap to be confirmed
• Assumability: a qualified buyer can assume your VA loan later, which can be valuable in a higher-rate market

Tradeoffs and eligibility

• The funding fee is real money unless you’re exempt; compare it against conventional PMI if you have a down payment
• Primary residence only; no second homes or pure rentals (though you can buy a 2–4 unit and live in one)
• Property condition requirements can complicate older homes and fixer-uppers
• Condos must be VA-approved projects
• Sellers can pay up to 4% of the price in concessions on top of normal closing costs; some fees can’t be charged to the veteran at all
• If a prior VA loan ended in a loss, remaining entitlement may be reduced

What you may need

• Certificate of Eligibility (Jared can request it)
• DD-214 for veterans; statement of service for active duty
• Photo ID
• 30 days of pay stubs or LES; two years of W-2s
• Two years of tax returns if self-employed
• Two months of bank statements
• Disability award letter if claiming a funding-fee exemption
• Child care statement and other residual-income items as requested

Common questions

Related options