VA Home Loan: Buy With No Down Payment

What it is

The VA home loan is not a loan from VA. It is a guarantee. A private lender (a bank, credit union or mortgage company) makes the loan, and VA promises to cover part of it if things go wrong. Because of that promise, lenders can offer you a deal most buyers never see: no down payment, no private mortgage insurance, and limits on some closing costs.

Who qualifies

You generally qualify if you served at least 90 continuous days on active duty while serving, or about 24 continuous months (or your full call-up of at least 90 days) as a veteran who served after August 1990. Guard and Reserve members qualify with six creditable years, or with 90 days of qualifying active duty. Some surviving spouses who get Dependency and Indemnity Compensation (DIC) also qualify. If you were discharged early for a service-connected disability, you may qualify with less time.

The funding fee, and who skips it

Most borrowers pay a one-time VA funding fee. It can be rolled into the loan. For a purchase with less than 5% down, it is 2.15% the first time and 3.3% after that. Put 5% down and it drops to 1.5%; put 10% down and it is 1.25%. A streamline refinance (IRRRL) costs 0.5%.

You do not pay the fee if you get VA disability compensation, if you are eligible for it but get retirement or active-duty pay instead, if you are a surviving spouse getting DIC, if you have a proposed or memorandum rating before closing, or if you are on active duty and have a Purple Heart. If your rating comes through later but is made retroactive to before your closing, ask about a refund.

Entitlement, limits, and using it more than once

Entitlement is the amount VA guarantees. If you have full entitlement, there is no VA loan limit. You can borrow as much as a lender will approve with no down payment.

If part of your entitlement is still tied up in another VA loan, the county loan limit comes into play. You can still buy again, but you may need a down payment on more expensive homes. Your COE shows how much is in use.

You can get entitlement back. The most common way is to sell the home and pay off the loan. You can also get a one-time restoration if you pay off the loan but keep the house.

How it works when you are relocating

Many military families PCS and keep their first home as a rental. That is allowed. You can use your remaining entitlement to buy at the new duty station, as long as you plan to live in the new home. Lenders generally expect you to move in within a reasonable time, often about 60 days. If you are deployed, a spouse living there can usually meet the rule.

Assumable loans are a big plus. A buyer can take over your VA loan, often at your lower interest rate, for a 0.5% fee. Be careful: if the buyer is not a veteran who swaps in their own entitlement, your entitlement stays tied to that loan.

IRRRL: If rates drop, a streamline refinance can lower your payment with little paperwork. You do not have to live in the home now, only to have lived there before.

Trouble paying? There is new help

In 2025, VA ended its old program for buying troubled loans (VASP). Congress then passed the VA Home Loan Program Reform Act, signed July 30, 2025. It created a Partial Claim Program, launched in 2026. After you make three on-time trial payments, VA pays your missed payments to bring the loan current. You pay that amount back when you sell or pay off the house. Servicers have until November 28, 2026, to add this option to their systems. Call your servicer first. If you get stuck, VA loan technicians can help at 877-827-3702.

How to apply

1. Request your COE on VA.gov or ask your lender to pull it.
2. Shop at least three VA-approved lenders. Rates and fees vary.
3. Get preapproved, then find a home with an agent who knows VA loans.
4. VA orders an appraisal to make sure the price is fair.
5. Close and move in.

Common mistakes

• Using a lender who rarely does VA loans and pushes you toward a conventional loan.
• Paying the funding fee when you are exempt. Check your COE before closing.
• Letting a non-veteran assume your loan without knowing it ties up your entitlement.
• Assuming you can only use the benefit once.

Related benefits

See our guides on Specially Adapted Housing grants, disability compensation (which can waive the funding fee), and state property tax breaks for veterans.