To use your VA home loan benefit, you need to confirm your eligibility, get a Certificate of Eligibility (COE), find a VA-approved lender, and go through a home buying process that includes a VA-specific appraisal. The VA doesn’t lend you money directly. Instead, it guarantees a portion of the loan you get from a private lender, which is what makes zero-down-payment mortgages and competitive interest rates possible.
Confirm Your Eligibility
Your eligibility depends on your service history. Active-duty service members qualify after at least 90 continuous days of service. National Guard and Reserve members qualify with either 90 days of active-duty service or six creditable years in the Guard or Selected Reserve. Veterans need varying amounts of active-duty time depending on when they served. Those who served during wartime periods (such as the Gulf War era, which started August 2, 1990, and is still ongoing) generally need at least 90 days. Veterans from peacetime periods typically need at least 181 continuous days. If you were discharged for a service-connected disability, shorter service periods may qualify you.
Surviving spouses of service members who died in the line of duty or from a service-connected disability may also be eligible.
Get Your Certificate of Eligibility
The Certificate of Eligibility (COE) is the document that proves to a lender you qualify for the VA loan benefit. You can request one online through the VA’s eBenefits portal, or your lender can pull it electronically during the application process, which is often the fastest route. You’ll need your DD-214 discharge papers if you’re a veteran, or a statement of service from your commanding officer if you’re still active duty.
Choose a Lender and Get Preapproved
Your loan comes from a private bank, mortgage company, or credit union, not from the VA itself. This means interest rates, fees, and service quality vary from lender to lender. Shopping around matters. Get quotes from at least three lenders and compare both the interest rate and the origination fees they charge.
Before you start looking at houses, ask your lender for a preapproval letter. This tells sellers you’re a serious buyer with financing lined up, and it gives you a realistic picture of how much home you can afford. During this step, the lender will review your credit, income, debts, and employment history.
Find a Home and Make an Offer
Work with a real estate agent to shop for homes in your price range. When you find one, your agent will help you write a purchase agreement. Make sure the contract includes the “VA escape clause” (also called the VA option clause). This gives you the right to back out of the deal without penalty if the VA appraisal comes in lower than the purchase price. Without this clause, you could be stuck paying the difference out of pocket or losing your earnest money.
The home must be your primary residence. You’re generally expected to move in within 60 days of closing. VA loans cannot be used to buy vacation homes or investment properties, though if you later PCS or move for other reasons, you can rent the home out after you’ve satisfied the occupancy requirement.
The VA Appraisal and Property Requirements
Every VA purchase loan requires an appraisal by a VA-assigned appraiser. This serves two purposes: it establishes the home’s market value, and it checks that the property meets the VA’s minimum property requirements (MPRs). These aren’t cosmetic standards. They’re basic safety and livability checks.
The home must have:
- Safe, adequate heating that maintains comfortable living conditions. Homes with a wood-burning stove as the primary heat source must also have a conventional heating system.
- Potable running water with domestic hot water and a safe sewage disposal system.
- A sound roof that prevents moisture from entering.
- Working electricity sufficient for lighting and necessary equipment.
- Adequate living, sleeping, cooking, and sanitary spaces.
- A clean, ventilated crawl space (if applicable), free of debris and excessive moisture.
If the property has any nonresidential use (like a home office or attached workshop), that space can’t exceed 25% of the total floor area or change the residential character of the property. The appraisal is not a substitute for a full home inspection, and the VA strongly recommends you pay for an independent inspection to catch issues the appraisal might not cover.
Understand the Funding Fee
Instead of requiring mortgage insurance like conventional loans, VA loans charge a one-time funding fee. This fee is a percentage of the loan amount and can be rolled into the loan itself so you don’t have to pay it upfront.
For a purchase loan with less than 5% down, the funding fee is 2.15% on your first use and 3.3% on subsequent uses. On a $300,000 loan, that’s $6,450 the first time or $9,900 on a later use. Put 5% or more down and the fee drops to 1.5% regardless of whether it’s your first or subsequent use. Put 10% or more down and it falls to 1.25%.
Veterans receiving VA disability compensation are exempt from the funding fee entirely. So are surviving spouses receiving dependency and indemnity compensation and Purple Heart recipients serving on active duty.
Close on Your Home
Your lender must provide a Closing Disclosure at least three business days before the closing date. This document lays out every cost: your loan terms, interest rate, monthly payment, and all fees. Read it carefully and compare it to the Loan Estimate you received earlier. Closing typically takes place at a title company, escrow office, or attorney’s office. Expect to sign a lot of paperwork, and take the time to read everything before you sign.
Closing costs on a VA loan generally include the appraisal fee, title insurance, recording fees, and any origination charges from the lender. The VA limits certain fees that lenders can charge borrowers, which can make closing costs slightly lower than on conventional loans.
Using Your Benefit Again
Your VA loan benefit isn’t a one-time deal. You can use it multiple times throughout your life, though your available entitlement depends on how much is currently tied up in existing VA loans.
If you’ve paid off a previous VA loan and sold that home, you can apply for a full restoration of your entitlement by submitting VA Form 26-1880. You’ll need proof the loan was paid in full, such as a payoff statement from the lender or a copy of the closing disclosure from the sale.
There’s also a one-time restoration option. If you’ve paid off your VA loan but still own the home, you can restore your entitlement once to buy a new primary residence. After using this one-time restoration, you’ll need to sell all VA-financed properties before any further entitlement can be restored. This flexibility is especially useful for service members who keep a previous home as a rental after a PCS move and want to buy again at their new duty station.