The US Department of Veterans Affairs runs the VA loan program, which guarantees mortgages with competitive interest rates, no down payments or mortgage insurance and accessible credit requirements to military service members and veterans.
Eligibility for these government-backed loans hinges largely on your service record, but lenders consider your credit scores, debt-to-income ratio and income. There are also VA home loan inspection requirements to meet — the property must be safe and structurally sound and pass a VA-specific appraisal.
If you can meet VA home loan requirements, you might prioritize this type of mortgage if you don’t have the down payment saved for a conventional loan; can get a lower APR than you would on other loan programs; or have a low credit score but a compensating factor (such as high income).
Who can get a VA loan?
VA loans are only available to military veterans and service members who are eligible for a Certificate of Eligibility (COE) from the Department of Veterans Affairs. To qualify, you must meet minimum service requirements, which depend on the date and duration of your service.
Minimum service requirements
| If you’re a… | You’re eligible for a COE if… |
|---|---|
Service member |
|
Veteran |
|
National Guard member |
|
Reserve member |
|
Spouse |
|
Tip: If you’re unsure about the exact dates or duration of your service, you can request your military service records online through the VA.
If you don’t meet the minimum service requirements above, you might be eligible if you were discharged for one of the following reasons:
- Hardship
- Convenience of the government (after serving at least 20 months of a two-year enlistment)
- Early out (after serving at least 21 months of a two-year enlistment)
- Reduction in force
- Certain medical conditions
- Service-connected disability
How to get a Certificate of Eligibility
All VA borrowers are required to have a COE. Although it’s wise to confirm your eligibility before shopping for a lender or a home, your lender can help you obtain your certificate at any point during the loan process.
“You don’t need to have this certificate in hand to start the VA loan process or to get preapproval, but you’ll need it before closing the loan,” said Chris Birk, an executive at lender Veterans United Home Loans.
If you’re a veteran, you must provide a copy of your discharge or separation papers. If you’re a current service member, you’ll need to request a statement of service from your commander, adjutant or personnel officer that includes the following information:
- Your full name
- Social Security number
- Date of birth
- Entry date of duty
- Duration of any lost time
- Name of officer verifying service
And if you’re the surviving spouse of a veteran, you must provide a copy of the veteran’s discharge papers and submit a Request for Determination of Loan Guaranty Eligibility — Unmarried Surviving Spouses form. If you aren’t receiving DIC benefits, you must provide an application for DIC, a copy of your marriage license and a copy of the veteran’s death certificate.
Once you have the verification paperwork required to get your COE, you can officially request it in one of the following ways:
- Online, through the Department of Veterans Affairs
- Through your lender during the VA loan application process
- By mail using a Request for a Certificate of Eligibility form (Note: Mail requests may take longer to process.)
Other VA requirements
Getting a COE is the most important hurdle to clear to verify your VA loan eligibility, but it’s not the only one. You must also meet the following guidelines:
- Residency: You must occupy the home within 60 days of closing on the loan (unless you’re currently deployed) and intend to live in it as your primary residence. This means you can’t use a VA loan to buy an investment property.
- Clear CAIVRS report: The VA requires lenders to perform a CAIVRS inquiry on all prospective VA borrowers. CAIVRS is a computer system that allows lenders to see whether you’ve previously defaulted on a federal loan, like a student loan or government-backed mortgage. If your CAIVRS inquiry indicates that you’re currently delinquent or have a recent foreclosure, you may not qualify for a VA mortgage.
Did you know? The VA used to impose loan limits on the mortgages it guaranteed, which meant you were limited to purchasing homes under a certain value. As of 2020, VA loans no longer have loan limits, but keep in mind that your lender might limit the amount you can borrow. If that happens, you might explore jumbo loans.
5 VA home loan requirements
The Department of Veterans Affairs sets eligibility metrics for the VA loan program — like qualifying for a COE and requiring borrowers to live in the property they’re purchasing — but lenders also have their own underwriting requirements.
“It’s also important to remember that being eligible for the benefit and being able to secure a VA home loan are two different things,” said Birk. “You’ll also need to meet VA and lender guidelines related to your ability to repay the loan.”
Here are five key requirements to qualify for a VA home loan:
| Category | Common requirement |
|---|---|
1. Credit scores | 620 or higher |
2. Debt-to-income ratio | 41% or lower |
3. Down payment | None |
4. Property standards | Must be safe, sound and sanitary |
5. Income and employment | Two years of employment, adequate income for your family size and area |
1. Credit scores above 620
The Department of Veterans Affairs doesn’t dictate a minimum credit score that borrowers must meet — but lenders do. Most lenders require credit scores of 620 or better for VA loans, which is the same score required for many conventional mortgages. However, some lenders may accept scores as low as 500 if you meet other eligibility requirements and have compensating factors, like high income.
It’s helpful to check your credit scores ahead of time — your financial institution or credit card issuer may provide free access to your scores, or you can buy them via a third-party service. Knowing where you stand can help you determine whether you’ll qualify for a loan and which lenders might be the right fit.
Related >> How to increase your credit scores
2. Debt-to-income ratio below 41%
Your debt-to-income ratio (DTI) is the percentage of your pre-tax income that goes toward debt payments each month. So, if you earn $5,000 and spend $2,000 on debt in the same 30-day period, your DTI is 40% ($2,000 / $5,000 = 0.40 or 40%).
Generally, the VA prefers a maximum DTI of 41%, and lenders follow that guideline. However, you may still qualify for a VA loan with a higher ratio if:
- Your DTI is higher than 41% because of tax-free income, which could include child support, worker’s compensation benefits, public assistance, disability retirement payments and more.
- Your residual income exceeds the acceptable limit by 20%. This is the amount left over after you’ve covered living expenses like shelter, food and gas, and these limits vary by family size and location.
3. No down payment required
“One of the hallmark advantages of VA loans is the opportunity for eligible borrowers to purchase a home without a down payment in many cases, making homeownership more accessible,” said Seth Bellas, a manager at lender Churchill Mortgage.
You can buy a home with as little as 0% down, while other types of mortgages require 3%, 3.5% or even 10% down. However, the no-down-payment option only applies if you have your full entitlement, which means you don’t currently have a VA loan.
If you have an outstanding VA loan (including one in foreclosure), the amount you can borrow will be limited and you may have to make a down payment to qualify. You may also choose to make a down payment to reduce your funding fee (more below).
Bottom line: All VA-approved lenders offer loans with no down payment, provided you don’t already have an outstanding VA loan.
4. Property requirements
Your home must meet the VA’s minimum property requirements (MPRs), which require it to be safe, structurally sound and sanitary. The MPRs outline specific standards related to your home, including access, drainage, mechanical systems, zoning, utilities, hazards, heating and more.
Your lender will arrange for an appraisal by a VA-approved appraiser to verify that the property meets the MPRs. If the home doesn’t meet these minimum standards, the appraiser will recommend repairs that must be completed, which generally must happen before closing.
5. Steady income and employment
The VA doesn’t set a minimum income requirement, but lenders assess whether you earn enough to repay the loan as agreed. In addition to reviewing your gross annual income, lenders also consider your residual income, or the amount remaining after you pay your potential mortgage and other basic living expenses (including certain debt). Residual income guidelines vary by family size and geographic area:
| Family size | Northeast | Midwest or South | West |
|---|---|---|---|
| 1 | $450 | $441 | $491 |
| 2 | $755 | $738 | $823 |
| 3 | $909 | $889 | $990 |
| 4 | $1,25 | $1,003 | $1,117 |
| 5 | $1,062 | $1,039 | $1,158 |
| 6 | $1,142 | $1,119 | $1,238 |
7 or more | $1,222 | $1,199 | $1,318 |
VA lenders also prioritize applicants with at least two years of employment. If you have fewer than two years of job history, you may still be eligible for a loan based on your past record of work, training and education and more. Ultimately, the lender must determine whether you’re likely to have continued employment that will allow you to repay the loan.
VA loan funding fee
This one-time fee is due at closing and helps compensate for the lack of down payments and mortgage insurance on VA loans. It can either be paid in full upfront or financed as part of the loan.
The amount of your funding fee depends on the size of your down payment and whether you’ve borrowed a VA loan before.
| Down payment amount | VA funding fee |
|---|---|
10% or more | 1.25% |
5% to 9.99% | 1.50% |
Less than 5% (first VA loan) | 2.15% |
Less than 5% (subsequent VA loans) | 3.30% |
You may qualify for a funding fee exemption if one of the following situations applies to you:
- You have a service-connected disability that makes you eligible for compensation
- You’re a Purple Heart recipient on active duty
- You receive Dependency and Indemnity Compensation as a surviving spouse
Other closing costs
Just like other mortgages, VA loans have upfront closing costs that can be 2% to 6% of your loan amount. Common closing costs include fees for the following:
- Origination
- Discount points
- Credit reports
- Appraisal
- Title insurance
- Recording
- State and local taxes
- Hazard insurance and real estate taxes
Certain costs, like origination fees, may be negotiable, while others aren’t, like taxes. Additionally, the seller may cover up to 4% of the loan amount in concessions (including the funding fee), but their willingness to pay some of your closing costs depends on the market and their urgency to sell.
Related >> Is a no-closing-cost mortgage really cheaper?
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Rocket Mortgage
Minimum Credit Score
580 for FHA and VA loans, 620 for conventional mortgages and 680 for jumbo loans
Days to close
Average closing time is 36 days for a conventional mortgage; 21 days for a refinance
Frequently asked questions (FAQs)
Unlike other mortgage types, VA loans don’t require mortgage insurance, even with a down payment of 0%. Instead, they require an upfront funding fee ranging from 1.25% to 3.3% of the loan amount.
In addition to standard verification documents — like W-2s, tax returns and pay stubs — you’ll need a Certificate of Eligibility from the VA. This document verifies that you qualify for a VA loan based on your service record.
You may qualify for a VA loan if you’re at least two years removed from Chapter 7 bankruptcy or foreclosure. The waiting period is one year after a Chapter 13 bankruptcy, provided you’ve followed the payment plan as prescribed by the court. However, bankruptcies and foreclosures can seriously impact your credit scores, so even if the waiting period has passed, you may not qualify for a VA loan unless you’ve also rebuilt your credit.
