GLOSSARY — REAL ESTATE TERMS
VA Loan
A VA loan is a mortgage guaranteed by the U.S. Department of Veterans Affairs, available to eligible veterans, active-duty service members, and some surviving spouses, typically requiring no down payment and no ongoing mortgage insurance.
Who qualifies and what makes it different
VA loans are available to eligible veterans, active-duty service members, and certain surviving spouses, verified through a Certificate of Eligibility. The defining features are no required down payment in most cases and no ongoing mortgage insurance -- a meaningful cost advantage over both FHA and most conventional loans.
The VA funding fee
In place of mortgage insurance, VA loans charge a one-time funding fee, which varies based on down payment size and whether it's a first or subsequent use of the benefit. Some veterans, including those with a service-connected disability rating, are exempt from this fee entirely.
WHAT TO DO IF YOU'RE VA-ELIGIBLE
- Request your Certificate of Eligibility before house hunting
- Ask your lender whether you qualify for a funding fee exemption
- Discuss with your agent how to position a VA offer in a competitive bidding situation
- Confirm the property meets VA minimum property requirements before offering
Do I need a down payment for a VA loan?
In most cases, no -- VA loans allow qualified borrowers to finance up to 100% of the purchase price, though a down payment can reduce the funding fee.
Can I use a VA loan more than once?
Yes -- VA loan benefits can generally be reused, though the funding fee percentage is typically higher on subsequent uses unless you're exempt.
Are all sellers willing to accept VA loan offers?
Most are, though in competitive multiple-offer situations some sellers perceive VA loans as involving a stricter appraisal process, which can be a factor worth discussing with your agent when structuring an offer.