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Purchase loan

Lenders offer competitive interest rates on VA-backed purchase loans. This can help you buy, build, or improve a home—especially if you don’t want to make a down payment. Find out if you’re eligible for this loan—and how to apply for your Certificate of Eligibility.

Am I eligible for a VA-backed purchase loan?

You may be able to get a VA-backed purchase loan if you meet all of the requirements listed below.

All of these must be true. You:

  • Qualify for a VA-backed home loan Certificate of Eligibility (COE), and
  • Meet our—and your lender’s—standards for credit, income, and any other requirements, and
  • Will live in the home you’re buying with the loan

See if you qualify for a VA-backed home loan Certificate of Eligibility (COE)

Why might I want a VA-backed purchase loan?

A VA-backed purchase loan often offers:

  • No down payment as long as the sales price isn’t higher than the home’s appraised value (the value set for the home after an expert reviews the property)
  • Better terms and interest rates than other loans from private banks, mortgage companies, or credit unions (also called lenders)
  • The ability to borrow up to the FannieMae/FreddieMac conforming loan limit on a no-down-payment loan in most areas—and more in some high-cost counties. You can borrow more than this amount if you want to make a down payment.
    See current effective loan limits.
  • No need for private mortgage insurance (PMI) or mortgage insurance premiums (MIP)
    • PMI is a type of insurance that protects the lender if you end up not being able to pay your mortgage. It’s usually required on conventional loans if you make a down payment of less than 20% of the total mortgage amount.
    • MIP is what the Federal Housing Administration (FHA) requires you to pay to self-insure an FHA loan against future loss.
  • Fewer closing costs, which may be paid by the seller
  • No penalty fee if you pay the loan off early

If you qualify for a VA-backed purchase loan, you can use the loan to:

  • Buy a single-family home, up to 4 units
  • Buy a condo in a VA-approved project
  • Buy a home and improve it
  • Buy a manufactured home or lot
  • Build a new home
  • Make changes or add new features (like solar power) to make your home more energy efficient

You can also:

  • Get a VA-backed home loan to buy your first home
  • Use your VA loan benefit again if you sell or refinance a home you bought with a VA-backed home loan
  • Assume a VA-backed home loan (which means that instead of opening a new mortgage loan, the buyer takes over the seller’s loan)

How can I buy a home with a VA-backed purchase loan?

Buying a home is a complex process, and getting a VA-backed home loan is only one piece of the puzzle. Stay on track by following the steps below.

Steps to finding a home

  1. Apply for your VA-backed home loan Certificate of Eligibility (COE).

    You’ll need to show your COE to your lender as proof that you qualify for the home loan benefit.
    Find out if you qualify for a COE.
    Apply for your COE now.

  2. Look at your current finances.

    Go over your credit profile, income, expenses, and monthly budget to make sure you’re ready to buy a home. Decide how much you want to spend on a mortgage—and be sure to include closing costs in the overall price.
    Get more advice from the Consumer Financial Protection Bureau.

  3. Choose a lender.

    You’ll go through a private bank, mortgage company, or credit union—not through us—to get your loan. Lenders offer different loan interest rates and fees, so shop around for the loan that best meets your needs.

  4. Choose a real estate agent.

    Meet with several real estate agents to find one you like. Read all agreements—and make sure you understand any charges, fees, and commissions—before signing with an agent.

  5. Shop for a home.

    Look at houses in your price range until you find one that works for you.

Steps to buying your home

Once you’ve found the house you want to buy:

  1. Work with your agent to put together and sign a purchase agreement.

    Be sure the sales contract includes the “VA Escape Clause.” This provides an option to void the contract if the property doesn’t appraise for the contract price.

  2. Have the house inspected and appraised.

    We strongly recommend that you get an inspection to check for any major defects before you purchase your home. A VA-approved appraiser will also appraise the house to make sure it meets basic property condition requirements, and will provide an opinion of value on the house. Please be aware that an appraisal isn’t the same as an inspection.

  3. Review pre-closing paperwork and give your lender any other needed information.

    Your lender must give you a Closing Disclosure at least 3 business days before closing. Be sure to read it carefully. It includes loan terms, fees, closing costs, and your estimated monthly mortgage payments. Your lender may also ask you to provide more information or documents at this time.

  4. Close on your new home.

    Your closing may be held at a title company, escrow office, or attorney’s office. Be prepared to sign a lot of documents—and be sure to take the time to read everything before you sign.

  5. Move in.

    After closing, you’re ready to move into your new home. Congratulations!

If you need more help:

Look for workshops from Department of Housing and Urban Development–approved housing counseling agencies.

Check out the Consumer Financial Protection Bureau’s home loan toolkit.

Learn more about VA-backed home loans.

Watch a video about VA home loans and how to apply.

Watch a video about the cost of home ownership.