The Complete VA Loan Guide for Active Duty, National Guard, Reserves, and Veterans

One of the coolest benefits we get as soldiers is the VA loan. It’s a tangible “thank you for your service” that doesn’t leave you feeling awkward in line at a Wendy’s. The VA loan can help you become a homeowner with no down payment, no mortgage insurance, and easier qualification criteria (you can get approval with a lower credit score).

Chances are unless you have the sickest Dodge Charger or a gold-plated XBOX, your house purchase is going to be the most expensive item you’ve ever bought. What that means is you should do yourself a favor and take a few minutes to educate yourself about the VA loan.

Family moving into a new home hanging a picture

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What is the VA loan?

The Veteran’s Administration (VA) loan is special type of loan that you can get to purchase a home. The VA loan could be called a home loan/mortgage/Veteran’s loan/ or any combination of those terms. They’re all interchangeable and are referring to the same thing we’re looking at today. What makes this loan unique (to begin with) is that it’s only available to certain members of the armed forces and some surviving spouses.

What’s interesting is that most VA loans come from a private lender. The VA backs a portion of the loan, which takes some of the risk away from the lender. This makes the lender more open to relax approval requirements and not require some of the same things other lenders do. There are some types of VA loans that you can get directly through the VA, but the more common types are through private lenders.

In other words, you’ll probably get your loan from a company that also has loans for civilians. But because of the connection with the VA, you’ll get a lot of added benefits.

The Benefits of a VA Loan

The reason that the VA loan is so popular is because of several benefits you can’t get with most other types of home loans.

  • No down payment required – You can get a VA loan and buy a house without putting up a big chunk of money towards the purchase.
  • No Private Mortgage Insurance – Traditional lenders charge people an extra insurance fee every month until they’ve paid off a certain % of their house. With the VA loan, you don’t have to pay this.
  • Easier Approval Limits – Because of how the VA loan works between the VA and private lenders, you can get approved with mediocre and even bad credit.

Am I eligible for the VA loan?

The biggest question that a lot of people have is whether or not they are eligible for the VA loan. The answer to this question depends on your status as a soldier, your component, and how long you’ve served. Let’s break it down by the most popular categories.

Active Duty Soldiers

If you’ve served more than 90 days on active duty now, you’re eligible for the VA loan. It’s that simple.

National Guard Soldiers and Reservists

Understanding VA loan eligibility for the NG and the Reserves is a little trickier as not everyone automatically gets the VA loan. Here’s what you need to know:

  • If you’ve served 90 days of active duty service, you’re eligible for the VA loan. Keep in mind this DOES NOT include TRADOC time. So, boot camp, AIT, BOLC, etc. don’t count towards this. Most deployments do count, but it gets trickier with state and local federal missions. While the VA is the final authority, it’s our understanding that Title 32 orders do not count towards this. Additionally, Title 10 ADT orders do not count either. Title 10 orders in support of a named operation DO count.
  • If you’ve served six credible years in the NG or Reserves, you’re going to be eligible. You won’t be getting this perk if you only do a two or four-year contract.


The list of VA loan eligibility requirements for Veterans depends on when you served and for how long. For most eras (time periods), serving between 90 days and two years is enough to qualify. The VA has a really nice eligibility chart that breaks all of this down clearly for Veterans.

Family Members, Dependents, and Surviving Spouses

Family members and dependents are not eligible for the VA loan. The only exception to this is some surviving spouses. The requirements are that one of these things about the soldier must be true:

  • They are missing in action.
  • They are a prisoner of war.
  • They died from a service-related disability and you didn’t remarry, or they died from a service-related disability and you didn’t remarry before you were 57 or before December 16, 2003, or they had been totally disabled and then died but the disability was not the cause of death (certain situations).

This can be a little tricky, but you can find more information at the VA on its surviving spouse’s home loan page.

Are there limits on the size of a VA loan?

In January of 2020, the VA did away with the limits on how large of a home loan you could get. In the past, there were limits that were determined by where you lived and the cost of living. Now, though, there are no limits on the size of a VA loan that you can get.

That being said, your lender can (and will) still impose their own limits. The lender will look at your credit score and finances and determine how much money they are comfortable lending to you. Just because you qualify for a VA loan doesn’t mean that a lender has to give you a loan. They’re more likely to, but not required to.

Are there limits on the use of a VA loan?

Yes, there are limits to the use of your VA loan.

What You Can Buy With a VA Loan

  • A house that you’re going to live in
  • A multi-unit property (up to four units), as long as you are living in one of them
  • Manufactured (mobile) homes
  • Construction loans to build a new house

What You Can Buy With a VA Loan

  • Homes outside of the U.S. or its territories
  • Farms
  • Investment properties
  • Second homes
  • Co-owned apartments

Can I use the VA Loan more than once?

Contrary to what some people say, you can use the VA loan more than once. The difference, though, is that you will pay a slightly higher VA funding fee. For example, if you pay no down payment, your funding fee is 2.3% for the first-time use but goes up to 3.6% for a second-time use.

VA Loans vs. Conventional Loans

A conventional loan is a “regular” loan that civilians get to purchase a home. However, just because you qualify for a VA loan doesn’t mean you have to use that loan. You can get any type of home mortgage loan you want if there is another type that’s a better fit.

When looking at VA loans vs. conventional loans, there’s a lot to consider.

  • VA loans have no private mortgage insurance (PMI). Conventional loans have PMI until you have 20-22% equity in your home.
  • VA loans require you to pay the VA funding fee, which is not required with a conventional loan. Veterans who receive disability (or are eligible to receive it), have earned the Purple Heart, or are a surviving spouse are exempt from the funding fee.
  • VA loans have a higher approval rate for people with mediocre and even bad credit. While there is no hard and fast rule, many lenders look for at least a 600 or 620 credit score for a VA loan.
  • Generally, VA loans will have lower interest/APR rates than a conventional loan. This is your cost of borrowing the money to buy the house.

So, which is better for you?

  • If you have the money to make a 20% down payment – You’ll probably do better with a conventional loan because you wont have to pay PMI but you would still have to pay the VA funding fee (which is kind of in place of PMI for VA loans).
  • If you don’t want to make a down payment at all – You’ll definitely want to get a VA loan. One of the biggest perks of the loan is that you can get it with no down payment. You do still have to pay the funding fee, but you can “roll that into your loan,” which means you will pay it over time instead of upfront.
  • If you don’t have great credit – You’ll have better approval odds with a VA loan. This would be your go-to.
  • If you have great credit – You should shop both options and see what rates you qualify for. The big decision comes with comparing the costs of PMI vs. the VA funding fee.
  • If you’re planning on being in your home for a short period of time – You might want to consider a traditional loan if you are okay with the down payment. The big decider here is again the cost of the PMI vs. the VA funding fee.

Let’s say you are getting a $200,000 house. The VA funding fee would be 2.3% if you do no down payment. This would be $4,600. The average PMI on this home with a conventional loan would be about $81 a month. If you’re only in the home for two years, you’ll pay 24 months x $81 = $1,944. This is a lot less than the VA funding fee. But if you’re staying longer, you’ll eventually break even and then start seeing some savings with the VA loan.

How-To Steps to Get a VA Loan

1. Make sure you’re qualified.

The first step in how to get a VA loan is to make sure you’re qualified. Earlier in this guide, we broke that down quite a bit for you. If you have more questions, you can always reach out to a lender or go to the VA’s website for more information.

2. Collect your documents and your COE.

Once you know you’re eligible, it’s time to get your documents together. The first document you’ll need is a Certificate of Eligibility (COE). This is a document you can take to a private lender that proves you’re eligible. Active duty can get a statement of service from a commander or personnel officer. NG, Reserves, and Veterans will need a copy of their DD-214. Once you have this, you can apply for your COE through the eBenefits portal.

Additionally, you’re going to need income documents (pay stubs or LES), bank statements, and any other documents that show your finances. Additionally, if someone is giving you money as a gift to use towards the house, you will need a letter from them stating that it’s a gift.

3. Start shopping lenders.

From there, it’s time to start shopping lenders. We’ll include a list of the top VA lenders here within the next few weeks (this site is new). The important thing to note here is that you’re shopping and contacting lenders BEFORE you pick out a house to buy. While this isn’t necessary, it can help you get the ball rolling on approval, as well as let you know how much you’re going to be approved for.

4. Pick out a house and make an offer.

At this point, you’re all set to find a house and make an offer! You’ve done the leg work. Now it’s time to shop with full confidence on what you can afford.

Tips for Success

  • Just because you qualify for the VA loan, you should still consider other types of loans.
  • Make sure you understand all of the fees and costs associated with the loan. While you can roll a lot of these into the loan, you’re still paying them (just not upfront). There’s nothing wrong with this, but you should be aware of it.
  • Shop lenders. It can be tempting to go with the first lender you see or the one your buddy suggests. However, the way to save the most and get the best bang for your buck is to contact a few lenders and see what they can do for you.