The 4-1-1 On VA Loans
VA Loans are guaranteed by the U.S. Department of Veteran Affairs, which enables the lender to offer eligible borrowers more favorable terms.
VA loans do not require downpayment or private mortgage insurance (PMI). There is also no minimum credit score. If you are a veteran or active member of the U.S. Armed Forces, or a spouse, a VA loan might be right for you.
Things to be aware of:
There may be an additional fee
Although VA mortgages do not require a downpayment or PMI and the costs of obtaining one are generally lower than other mortgages, they still carry a one-time funding fee that varies based on the amount of the down payment and the type of veteran.
Underwriting requirements vary by lender
Lenders generally have internal credit score requirements for the best rates -- borrowers must show sufficient income to repay the loan and shouldn't have excessive debt, but the guidelines are more flexible for a VA mortgage.
VA loans are available for primary homes only
A VA loan can not be used to purchase or refinance vacation or investment homes.
There are purchase price limits
Home price limits vary by county. Click to view current limits from the U.S. Department of Veterans Affairs.