VA Mortgage Q&A
VA Mortgage Basics: Complete Guide for Veterans and Military Families
VA Mortgage Basics matter because veterans and service members deserve clear answers. Too often, lenders add rules that are not part of the VA program. If you were told “no” because of credit score, debt-to-income, or past hardships, the VA loan program may still be open to you. This guide explains how VA loans work, who qualifies, what entitlement means, and how to use your benefit wisely. Talk to the JD.Mortgage team at PRMG if you want your personal VA loan review.
What Is a VA Loan?
A VA loan is a home loan for eligible veterans, active duty members, and some surviving spouses. The VA does not lend money—it provides a guarantee. That guarantee means the lender can offer you better terms like $0 down payment and no monthly mortgage insurance. With full entitlement, you can buy up to current limits without any down payment. See our VA Loans overview.
Who Qualifies for VA Loans?
Eligibility is based on your service record. Active duty, veterans, certain National Guard or Reservists, and qualifying surviving spouses can all apply. Even if you had a past foreclosure, short sale, or bankruptcy, you may still be eligible. Learn about VA loans with no minimum credit score.
VA Entitlement Explained
Entitlement is the VA’s promise to guarantee part of your loan. With full entitlement available, you can buy with no down payment up to the FHFA loan limit for your county. In 2025, that’s $806,500 in most areas. If you have unrestored entitlement from a past VA loan, your $0 down maximum may be lower. Read about VA after foreclosure or short sale.
Benefits of VA Loans
- No down payment required with sufficient entitlement
- No monthly mortgage insurance (PMI)
- Competitive interest rates
- Flexible credit standards
- Manual underwriting available for challenging files
- Funding fee waived for veterans with disability benefits
These benefits save thousands over the life of a loan. See your savings with our calculator.
Credit and Income Guidelines
The VA itself does not set a minimum credit score. Many lenders add their own overlays, but approvals are based on your overall financial picture. Residual income—the money left after paying major bills—is one of the biggest factors. Strong residual income can allow approval even with higher debt-to-income ratios. See residual income basics.
Manual Underwriting
When automated underwriting says “Refer,” VA allows manual underwriting. This means an underwriter looks at the entire file—credit history, rental record, savings, compensating factors—before making a decision. Many lenders won’t do manual underwriting. We do. Read about manual underwriting.
Seller Concessions and Closing Costs
VA lets sellers help with costs. They can pay certain fees, cover some debts, or help reduce your interest rate. Concessions are capped at 4% of the price, but normal closing costs and customary discount points are not part of that cap. We’ll structure this correctly so you stay compliant. See our VA concessions guide.
VA Loan After Hardship
Bankruptcy, foreclosure, or short sale? You may still be eligible. The key is understanding how much entitlement remains. Reduced entitlement may lower your $0 down maximum, but it doesn’t end your VA benefit. See foreclosure examples.
VA Loan Assumptions
VA loans are assumable, which means a buyer can take over your existing VA loan. But sellers must protect their entitlement. Liability release is not the same as substitution of entitlement. Realtors and veterans need to understand the difference. See our guide for buyers and sellers.
VA Appraisals
The VA appraisal checks that the home is safe, sound, and sanitary. It’s not as strict as many think. Repairs can be negotiated and handled in contract. We’ll guide you so there are no surprises.
Refinancing with VA
If you already have a VA loan, you may qualify for a VA IRRRL (Interest Rate Reduction Refinance Loan) with fewer documents. You can also consider a VA cash-out refinance for debt consolidation or equity access. See refinance options.
Step-by-Step VA Loan Process
- Get your COE (Certificate of Eligibility)
- Get pre-approved
- Shop for a home with your agent
- Structure concessions and contract correctly
- Appraisal and underwriting review
- Final approval and closing
We coordinate with your realtor so the contract matches VA rules. See the mortgage process.
VA Mortgage Basics FAQs
Do VA loans require mortgage insurance?
No. VA loans never require monthly mortgage insurance, unlike FHA or Conventional loans. Compare FHA vs VA.
Is there a VA minimum credit score?
No. The VA does not require a minimum score. Lender overlays may differ, but approvals depend on income, debts, and residual income.
Can I buy a second home with a VA loan?
No. VA loans are only for primary residences. You must occupy the home as your main residence. See other loan options.
What is VA residual income?
Residual income is the money left after paying taxes, housing, and major debts. VA sets regional minimums. It’s a key factor for approval. See residual income tables.
Do VA loans have a funding fee?
Most VA loans require a funding fee unless you receive VA disability benefits. This can be financed into the loan. See how it affects payment.
How soon after foreclosure or bankruptcy can I get a VA loan?
Usually 2 years, but this depends on your circumstances and underwriter review. See our guide.
What are seller concessions on VA loans?
Sellers can pay certain costs and debts up to 4% of the sales price. Discount points are separate and can reduce your interest rate. Learn about concessions.
Are VA loans assumable?
Yes. VA loans can be assumed by another buyer, but entitlement must be handled carefully to protect the seller. Read more.
Do VA loans limit purchase price?
No. With full entitlement there is no loan limit. With partial entitlement, the $0 down maximum depends on county loan limits. Learn more.
Can I buy a multi-unit property with a VA loan?
Yes, up to four units, as long as one is owner-occupied. Check details.
What is the VA appraisal process?
VA appraisals ensure the property is safe, sound, and sanitary. Repairs may be required but are often negotiable. See our process.
Can I refinance with a VA loan?
Yes. The VA offers IRRRL and cash-out options depending on your goals. Compare refinance paths.
Other Loan Programs We Offer
If VA isn’t the right fit, we also offer FHA, Conventional, USDA, Jumbo, Non-QM (DSCR, ITIN, bank statement), HELOC, Second mortgages, Reverse mortgages, and Construction loans. Ask us what’s best for you.