The VA loan program is one of the strongest benefits available to eligible veterans, service members, and some surviving spouses, but "0% down, no PMI" undersells both how it works and where the real costs sit.
Who's eligible
Eligibility runs through service history, not income or need. In general terms: 90 consecutive days of active service during wartime, 181 days during peacetime, six years of qualifying National Guard or Reserve service, or being the surviving spouse of a service member who died in the line of duty or from a service-connected disability. Eligibility is confirmed through a Certificate of Eligibility (COE), which most lenders can pull directly through the VA's system rather than requiring you to obtain it yourself first.
What actually makes it valuable
- No down payment required on most loan amounts, without the loan-to-value restrictions conventional low-down-payment programs carry.
- No monthly mortgage insurance, ever — this is the single biggest cost difference versus FHA or low-down conventional loans, often worth $100–$300 a month depending on loan size.
- More flexible underwriting on debt-to-income and credit history than conventional loans typically allow, similar in spirit to FHA but usually with better pricing.
- Assumability — a VA loan can, with lender approval, be taken over by a buyer at your existing rate, which becomes valuable if you sell during a period of higher rates than when you bought.
The cost that catches people off guard: the funding fee
In place of monthly mortgage insurance, VA loans carry a one-time funding fee, usually 1.25%–3.3% of the loan amount depending on down payment size and whether it's a first or subsequent use of the benefit. It can be financed into the loan rather than paid at closing, which is convenient but means it accrues interest for the life of the loan. Veterans receiving VA disability compensation are exempt from the funding fee entirely — worth confirming before you assume the fee applies to you.
Property requirements are stricter than they look
VA loans require the property to meet Minimum Property Requirements (MPRs) — safe, sound, and sanitary. This trips up more purchases than the credit or income side does: peeling exterior paint on an older home, a non-functioning well or septic system, missing handrails, or an unpermitted addition can all stall or kill a VA purchase until repaired. Sellers unfamiliar with VA loans sometimes assume these requirements are the lender being difficult; they're actually VA-wide standards that apply regardless of which lender is used.
Where VA lenders differ from each other
Not every lender treats VA loans the same way. Volume matters: a lender that closes a handful of VA loans a year is more likely to stumble on the MPR appraisal process or funding-fee exemption paperwork than one that specializes in it. Turn times and overlays also vary meaningfully — some lenders add credit-score minimums above what the VA itself requires. Before choosing a lender for a VA purchase, it's worth comparing VA loan volume by lender alongside each lender's overall denial rate and reasons, since a lender that rarely touches VA loans is a different bet than one built around them.