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.
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Am I eligible for a VA-backed purchase loan?
You may be eligible for 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
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 Fannie Mae/Freddie Mac 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.
Learn about VA home 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?
Will I have to pay any fees with my loan?
You may need to pay the VA funding fee. This one-time fee helps to lower the cost of the loan for U.S. taxpayers since the VA home loan program doesn’t require down payments or monthly mortgage insurance. Your lender will also charge interest on the loan in addition to closing fees.
Learn about the VA funding fee and other closing costs