What is a VA home loan? Everything you need to know

There was a time when VA loans were seen as slow, complicated, and difficult to close. Some sellers still carry that impression—and may even hesitate to accept offers from VA buyers because of it. But times have changed.

Today, VA loans are streamlined, efficient, and backed by clear guidelines. As long as the buyer and the property meet VA standards, the typical turnaround time in 2025 is just 30 days—right in line with conventional financing. VA loans are now one of the most borrower-friendly options in the mortgage world.

If you’re a veteran, active-duty service member, or surviving spouse, this powerful benefit could help you buy a home with no down payment and highly favorable terms. Here’s everything you need to know.

What Is a VA Home Loan?

A VA home loan is a mortgage option backed by the U.S. Department of Veterans Affairs and offered through private lenders. It was created to help eligible veterans and military families purchase, refinance, or adapt a home with easier qualification terms and reduced upfront costs.

Instead of lending directly, the VA guarantees a portion of the loan, giving lenders confidence to offer better rates and terms—often with no down payment, no private mortgage insurance (PMI), and more flexible credit guidelines.

couple looking for an apartment

 

Types of VA Loans

  • VA Purchase Loan – Buy a primary residence with no down payment and no PMI.
  • VA Interest Rate Reduction Refinance Loan (IRRRL) – Also called a VA Streamline Refinance, this helps lower your interest rate with minimal paperwork.
  • VA Cash-Out Refinance – Tap into your home’s equity—even if your current mortgage isn’t a VA loan.
  • VA Renovation Loan – Finance the purchase and renovation of a home under a single mortgage.
  • VA Adapted Housing Grants – Help qualifying veterans with service-connected disabilities build, buy, or modify a home to meet their needs.

Benefits of VA Loans

  • No Down Payment – One of the few programs that allows 100% financing.
  • No PMI – Unlike FHA or conventional loans, VA loans don’t require monthly mortgage insurance.
  • Competitive Interest Rates – Often lower than those of conventional loans.
  • Flexible Credit Standards – More forgiving of lower credit scores and higher debt-to-income (DTI) ratios.
  • Limited Closing Costs – The VA limits what lenders can charge in fees.
  • VA Funding Fee Waiver – Veterans with a service-connected disability (including those who retire due to that disability) are exempt from the VA funding fee, which can save thousands.

 

a couple takes out a loan on an apartment

VA Loan Requirements

Military Service Requirements

  • 90 consecutive days of active service during wartime, or
  • 181 consecutive days of active service during peacetime, or
  • 6 years of service in the National Guard or Reserves, or
  • You are the surviving spouse of a service member who died in the line of duty or as a result of a service-connected disability

Additional Requirements

  • Certificate of Eligibility (COE) – Confirms you meet VA service criteria.
  • Primary Residence – VA loans can only be used for your primary home.
  • Credit and Income – While flexible, lenders still require stable income and acceptable credit history.

Drawbacks of VA Loans (and Why They’re Worth It)

  • VA Funding Fee – Most borrowers pay a one-time funding fee (1.25%–3.3% of the loan amount), though it’s waived for veterans with service-connected disabilities.
  • Occupancy Requirement – VA loans can’t be used for vacation homes or investment properties.
  • Stricter Property Standards – VA appraisals are more thorough and additional inspections are required, such as:
  1. Termite inspection
  2. Well water testing (if the home uses a private well)
  3. Septic system (based on appraiser’s evaluation)

These requirements are designed to protect veterans—ensuring the home is safe, sanitary, and structurally sound.

  • Sellers May Hesitate – Some sellers are still hesitant to accept VA offers due to outdated perceptions of slow processing. However, in today’s market, VA loans close just as quickly as conventional loans, and when paired with a strong offer, they are just as competitive.

apartment loan

How to Apply for a VA Loan

  1. Check Eligibility – Review your service record to ensure you qualify.
  2. Obtain Your Certificate of Eligibility (COE) – Apply online or let your lender help.
  3. Find a VA-Approved Lender – Not all lenders handle VA loans, so choose one with experience.
  4. Get Pre-Approved – Know how much home you can afford before you start house hunting.
  5. Make an Offer and Go Under Contract
  6. Appraisal and Underwriting – The VA appraisal ensures the home meets minimum standards.
  7. Close and Move In – Once everything’s approved, you’ll sign final paperwork and get the keys!

Final Thoughts

The VA loan is one of the most powerful benefits of military service—a true pathway to affordable homeownership. Despite some outdated misconceptions, VA loans today are fast, streamlined, and highly competitive.

If you’re thinking about buying a home and you’re eligible for a VA loan, don’t let this opportunity pass you by. The benefits are real, the process is straightforward, and the savings can be significant.

Have questions or need help getting started? Feel free to reach out to me at 312-296-4175 or email me at connect@borislending.com — I’m here to help you navigate the process and make the most of your VA home loan benefits. I lend in all 50 states and I am never too busy for your referrals!!