What is a VA Mortgage Loan?

VA loans usually offer lower rates and may not require any down payment. Credit score and income requirements are typically lower than those of conventional loans also Closing costs are most often lower than those of conventional loans as well. Private mortgage insurance (PMI) is not required for VA loans. There is no limit on the amount of the loan. However, the VA will not guarantee more than 25% of the loan.

Types of VA loans

Purchase Loan – to build or purchase a residential property

Native American Direct Loan (NADL) – must be a Native American veteran or veteran married to a Native American to qualify

Interest Rate Reduction Refinance Loan (IRRRL) – must be in an existing VA loan looking to reduce your monthly payment

Cash-out Refinance – borrow against your home equity to pay off debt, make home improvements, take a vacation, etc.


  • VA loans require a Certificate of Eligibility, or COE.
  • The VA will insure a maximum of 25% of your loan amount.
  • There is also a required VA funding fee that can be as high as 3.3%.
If you meet certain requirements, you may be exempt from paying the VA funding fee.
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