Eligibility Requirements for VA Home Loans

What is a VA Loan?

VA loans are guaranteed by the U.S. Department of Veterans Affairs (VA) and allow qualified veterans or active duty personnel and/or their current or surviving spouses to finance up to 100% of the purchase price of their home. They also allow for the streamlined refinancing of VA loans in the event interest rates decline. The VA does not actually make loans, but instead guarantees the loans made by VA lenders, such as banks or mortgage companies.

Who is eligible for a VA loan?

VA loans may be available to veterans, active duty personnel, reservists or National Guard members, and/or their current or surviving spouses. For a detailed list of qualifications, Click here.

What are the income requirements to obtain a VA loan?

Generally borrowers must have a minimum of two years of steady employment. Not applicable for VA Streamline Refinances.

What are the credit requirements to obtain a VA loan?

Generally a minimum credit score of 640 is required (660 if loan amount is >$424,100). Bankruptcies must have been discharged for at least two years and foreclosures must be at least two years old, with perfect credit following the bankruptcy or foreclosure.

What are the VA loan limits?

The maximum loan amount VA will guarantee depends on the state and county in which the property is located. For most counties the maximum VA loan amount is $424,100. However, in "high cost" counties, the limit is higher, up to a maximum of $1,000,000. To learn more about VA loan limits and view a list of 'high cost' counties, Click here.

If I have my Certificate of Eligibility, am I guaranteed to get a VA loan?

You are guaranteed for a VA loan once qualification is complete. The lender has to make sure you are able to support the mortgage payment for the home. The borrower must still qualify based on their income, assets, and credit history.

Do I have to pay my closing costs out of pocket?

It depends on how you structure the sales contract. You can have the seller pay as much as 6% of the borrower's closing costs for a VA loan. Many people take advantage of this. Be sure to talk to your realtor about this seller concession.

What is the VA funding fee?

The VA funding fee is what the VA charges to guarantee the loan. It is not a fee that has to be paid at closing out of pocket. This fee can simply be added to your base loan amount and is paid over the life of the loan. This fee basically takes the place of the mortgage insurance that you would normally find on a conventional loan.

How much is the VA funding fee?

The VA funding fee is based on your down payment and your military/veteran status. To view a VA Funding Fee Table, click here

If I have a service related disability, am I exempt from the VA funding fee?

If you are receiving disability income from the VA you should be exempt from any of VA's funding fees.

Will I have mortgage insurance?

One of the great benefits of the VA loan is that it enables you to borrow up to 100% of the home's appraised value without having to pay mortgage insurance. The VA charges a funding fee that is much less expensive than mortgage insurance and isn't part of your monthly mortgage payment.

Can I buy an investment property with a VA loan?

VA loans are only available to purchase a home you plan to live in as your primary residence.

What property types are eligible for VA loans?

VA loans may be used to purchase a single-family residence, duplex, condo or townhome.

Refinance FAQs

Must I use my current lender to refinance?

No. You can choose any mortgage lender on the VA approved lender's list. Make sure that you shop around for your VA refinance. By researching several lenders you will get more offers and you can choose the lender with the lowest rate and fees. AimLoan provides an online loan estimate and guarantees total closing costs, including both lender fees and third party charges.

Do I have to get another Certificate of Eligibility when refinancing?

Since you already provided this when you bought the property, no additional proof of a Certificate of Eligibility is needed.

What out-of-pocket expenses will I have when refinancing?

VA allows all closing costs of refinancing to be financed into your new mortgage.

If I was exempt from paying the VA funding fee when I bought the house, am I still exempt when I refinance?

As long as you are still classified as 10% disabled or more you should be exempt from a VA funding fee.

What is a VA Cash Out Refinance?

This is a refinance program the VA offers for those veterans or active military who want to take cash out of the equity in their homes. You must be refinancing an existing VA loan in order to use the VA Cash Out Refinance program. You may borrow up to 90% of the value of your home, provided you qualify.

Can I refinance a conventional loan into a VA loan?

If the circumstances are favorable, a borrower can use their VA eligibility to refinance a conventional loan into a VA loan. This is not the same as the VA Streamline Refinance mentioned elsewhere. If the borrower has an adjustable rate mortgage (ARM) or a high fixed interest rate, and the balance on their loan is greater than 80% of the value of the home, then converting to a VA loan may be worth looking into. The biggest hurdle in refinancing into a VA loan is there is a VA Funding Fee on this type of refinance unless the borrower is exempt from the VA funding fee due to disability.

Program Guidelines

Primary Residence

Purchase
Property Type Max Loan Amount Max LTV2 Max CLTV Min FICO
ALL 424,1001 100 100 620
No Cash Out Refinance
Property Type Max Loan Amount Max LTV2 Max CLTV Min FICO
ALL 424,1001 90 90 620
Cash Out Refinance
Property Type Max Loan Amount Max LTV2 Max CLTV Min FICO
ALL 424,1001 90 90 620
Risk-Based Add-OnsAdded to Points or Subtracted from Rebate, All Add-Ons are Cumulative

FICO Score2

FICO LTV
<= 60%
LTV
60.01-70
LTV
70.01-75
LTV
75.01-80
LTV
80.01-85
LTV
85.01-90
LTV
90.01-100
701+ 0.000 0.000 0.000 0.000 0.000 0.000 0.000
661-700 0.500 0.500 0.500 0.500 0.500 0.500 0.500
640-660 0.875 0.875 0.875 0.875 0.875 0.875 0.875
VA Funding Fee Table

Purchase Transactions

Veteran/Military
Status
Down
Payment
Percentage for
first time use
Percentage for
subsequent use
Veteran/Active
Duty
< 5% 2.15% 3.30%
5-9.99% 1.50% 1.50%
>=10% 1.25% 1.25%
Reserves/National
Guard
<5% 2.40% 3.30%
5-9.99% 1.75% 1.75%
>=10% 1.50% 1.50%
Disabled Veteran
(Service Connected Disability)
N/A 0.00% 0.00%

Cash Out Refinance Transactions

Veteran/Military
Status
Percentage for
First Time Use
Percentage for
Subsequent Use
Veteran/Active Duty 2.15% 3.30%
Reserves/National Guard 2.40% 3.30%
Disabled Veteran (Service Connected Disability) 0.00% 0.00%

VA Streamline Refinance Transactions

Veteran/Military
Status
Percentage for
First Time Use
Percentage for
Subsequent Use
Veteran/Active Duty 0.50% 0.50%
Reserves/National Guard 0.50% 0.50%
Disabled Veteran (Service Connected Disability) 0.00% 0.00%

Notes:

(1) $424,100 or max county loan limits

(2) These add-ons are included in the initial rate search.

Our most popular program! Because 30 years is the longest term available, the monthly payments will be the lowest of any of the fixed rate programs.
Our second most popular program! You pay a lower rate and build equity faster than you would with a longer term program. The monthly payments are higher, but the savings over the life of the loan are considerable.