VA Loan Knowledge Center - About VA Loan

What is a VA Loan?

A VA loan is a government-backed mortgage option available to Veterans, service members and surviving spouses. VA loans are made by private lenders, like mortgage companies and banks, and not the Department of Veterans Affairs. VA home loans offer competitive interest rates and terms and can be used to purchase a single-family home, condominium, multi-unit property, manufactured homes or new construction.

The Process

A VA mortgage is a VA-guaranteed home loan, but the process for buying a home with one is similar to any other mortgage type.
You'll work with a lender to get preapproved, shop for a home, make an offer, go through underwriting and the appraisal process and loan closing.

Besides the benefits including $0 down payment and no mortgage insurance, the largest difference with VA loans is that the lender will need to verify your eligibility for a VA loan – that is done by the lender in-house.
If you're ready to start your VA loan, check your eligibility or have specific questions on the VA loan, talk to a Florida’s VA Mortgage Center loan officer today!

VA Loan vs. Regular Mortgages

The federal government created the VA home loan program to make homebuying easier for those who serve our country. The VA program offers arguably the most powerful loan option on the market.
Veterans can purchase with no down payment, no mortgage insurance, flexible credit guidelines and the industry's lowest average fixed rates. VA loans and conventional mortgages are two very different types of home loans available to borrowers in the United States.
They have distinct characteristics and eligibility requirements, which make them suitable for different types of borrowers. Here's a comparison of VA loans and conventional mortgages:



VA loans are guaranteed by the U.S. Department of Veterans Affairs and are primarily available to active-duty service members, veterans, and certain eligible family members. To qualify, borrowers typically need to meet specific service requirements and obtain a Certificate of Eligibility (COE).

Conventional mortgages are not backed by a government agency and are available to a broader range of borrowers. Eligibility depends on factors such as credit score, income, and down payment.

One of the most significant advantages of VA loans is that they often require no down payment. However, borrowers can choose to make a down payment if they wish to reduce their funding fee and lower the loan amount.

Conventional mortgages typically require a down payment, which can vary but often ranges from 3% to 20% of the home's purchase price. The specific down payment requirement depends on the lender and the borrower's creditworthiness.

VA loans tend to be more lenient when it comes to credit requirements, making them accessible to borrowers with lower credit scores.

Conventional mortgages may have stricter credit score requirements, and borrowers with higher credit scores often qualify for better interest rates.

VA loans often come with competitive interest rates, although they may be slightly higher than those for conventional mortgages.

Interest rates on conventional mortgages can vary depending on the borrower's creditworthiness and market conditions.

VA loans do not require private mortgage insurance (PMI) even with a zero down payment, which can save borrowers money.

If a borrower makes a down payment of less than 20% on a conventional mortgage, they typically need to pay for PMI until they reach a 20% equity stake in the home.

VA loan limits vary by location and are designed to accommodate the cost of housing in different areas. In some high-cost areas, borrowers can obtain VA loans for higher amounts.

Conventional mortgage limits are set by Fannie Mae and Freddie Mac and are generally lower than VA loan limits.

VA loans limit the amount veterans can be charged for closing costs, making them more affordable for borrowers.

Closing costs for conventional mortgages can vary widely and may be negotiated between the borrower and the lender.

In summary, VA loans are a great option for eligible military personnel and veterans due to their low or no down payment requirement, lenient credit criteria, and competitive interest rates. Conventional mortgages are more widely available but often require a down payment and may have stricter credit requirements. Borrowers should carefully evaluate their eligibility and financial situation to determine which type of loan is the best fit for their needs.

Types of VA Loans

The VA loan benefit offers qualified Veterans multiple home loan options.

Veterans and Active Duty service members can use the VA loan to purchase new or existing homes with $0 down payment.

VA purchase loans also allow Veterans to buy single-family homes, condominiums, manufactured homes, multi-unit properties (like a duplex) and even new construction.
Policies and guidelines can vary by lender. Some lenders may not make all of these types of VA purchase loans. If you're ready to start your VA loan, check your eligibility or have specific questions on the VA loan, talk to a Florida’s VA Mortgage Center loan officer today!

The VA IRRRL, or the VA Interest Rate Reduction Refinance Loan, is a specific type of refinancing option available to eligible veterans and active-duty service members who have an existing VA loan.
IRRRL is also commonly referred to as the "VA Streamline Refinance" because it simplifies the refinancing process and aims to lower the interest rate on the current VA loan. Here are the key features and benefits of the VA IRRRL:

1. Simplified Process: The VA IRRRL is designed to be a straightforward and streamlined refinance option. It typically requires less documentation and paperwork compared to a traditional refinance.

2. No Appraisal Required: In many cases, an appraisal is not necessary for a VA IRRRL. This can save both time and money for borrowers, as well as eliminate concerns about the home's current value affecting the refinance.

3. Lower Interest Rates: The primary goal of a VA IRRRL is to reduce the interest rate on the existing VA loan. Borrowers can take advantage of lower market interest rates to potentially lower their monthly mortgage payments.

4. No Out-of-Pocket Costs: Borrowers are allowed to include closing costs in the new loan amount. This means that in many cases, there are no out-of-pocket costs associated with the refinance.

5. No Credit Check or Income Verification: Unlike some other refinance options, the VA IRRRL typically does not require a credit check or income verification. This makes it accessible to veterans with varying credit histories.

6. No Cash-Out Option: The VA IRRRL is specifically for rate reduction and does not allow borrowers to take cash out from their home's equity. If a borrower wants to tap into their home's equity, they would need to consider a different type of loan, such as a VA Cash-Out Refinance.

7. Must Currently Have a VA Loan: To be eligible for a VA IRRRL, the borrower must already have an existing VA loan. This refinance option is intended to make it easier for veterans with VA loans to take advantage of lower interest rates.

8. Occupancy Requirements: The property being refinanced must have been the borrower's primary residence. If the borrower has moved out of the property, they may still be eligible if they have a remaining entitlement and intend to certify that they previously occupied the home.

9. Funding Fee: A VA funding fee is generally required for VA loans, including the IRRRL. However, this fee is often lower for IRRRLs than for initial VA loans, especially if the borrower is a veteran and receives disability compensation.

The VA Cash-Out Refinance loan is a mortgage option available to eligible veterans, active-duty service members, and certain members of the National Guard and Reserves in the United States.
It allows borrowers to refinance their existing mortgage loan and take out a portion of the home's equity in the form of cash. Here are the key features and benefits of the VA Cash-Out Refinance:

1. Access to Home Equity: The primary purpose of a VA Cash-Out Refinance is to allow homeowners to convert a portion of their home's equity into cash. This can be used for various purposes, such as home improvements, debt consolidation, education expenses, or other financial needs.

2. Loan-to-Value (LTV) Ratio: The amount of cash a borrower can take out in a VA Cash-Out Refinance is subject to the loan-to-value ratio limitations. As of my last knowledge update in September 2021, the VA allows borrowers to refinance up to 100% of the appraised value of their home. However, the new loan, including the cash-out amount, cannot exceed the appraised value. Please note that these limits can change, so it's essential to check the most up-to-date guidelines with a VA-approved lender.

3. Eligibility Requirements: To qualify for a VA Cash-Out Refinance, borrowers must meet specific eligibility requirements, including having a Certificate of Eligibility (COE) and meeting service and credit requirements. Generally, borrowers should have a decent credit history and sufficient income to cover the new loan payments.

4. Interest Rates: VA Cash-Out Refinance loans typically offer competitive interest rates, which can make them an attractive option for veterans seeking to access their home equity. However, interest rates may vary depending on market conditions and the borrower's creditworthiness.

5. Funding Fee: Similar to other VA loans, the VA Cash-Out Refinance may require a funding fee. The funding fee is a one-time fee that helps offset the cost of the VA loan program. The amount of the fee depends on factors such as the borrower's military service category, down payment, and whether it's the borrower's first VA loan. Veterans receiving disability compensation may be exempt from this fee.

6. Debt Consolidation: Many borrowers use VA Cash-Out Refinance to consolidate high-interest debts, such as credit card balances or personal loans. By rolling these debts into the mortgage, borrowers can often benefit from lower interest rates and a single monthly payment.

7. Credit and Income Verification: Borrowers should expect their credit history and income to be reviewed during the application process. Lenders will assess the borrower's ability to repay the new loan.

8. No Mortgage Insurance: VA loans, including Cash-Out Refinances, do not require private mortgage insurance (PMI), even if the borrower does not make a substantial down payment.

9. Home Appraisal: A home appraisal is generally required to determine the current value of the property, which is used

The VA Cash-Out refinance allows Veterans to refinance their mortgage and take out cash from their home's equity.
These loans are available to Veterans with and without current VA loans.

Qualified Veterans can refinance up to 90 percent of their home's value.

Lending guidelines and loan-to-value requirements can vary by lender.

Homeowners are not required to take out cash with these loans, which means Veterans with non-VA mortgages can use this option as a rate-and-term refinance.

Is the VA loan a good option?

VA loans are arguably the most powerful loan option on the market. Whether a VA loan is a good option for you depends on your specific financial situation, military service history, and homeownership goals. VA loans offer numerous benefits, but they are not suitable for everyone. Here are some factors to consider when determining if a VA loan is a good option for you:

  • Advantages of VA Loans:

    1. No Down Payment: One of the most significant advantages of VA loans is that they often allow borrowers to purchase a home with no down payment, making homeownership more accessible.
    2. Competitive Interest Rates: VA loans typically offer competitive interest rates, which can result in lower monthly mortgage payments compared to other loan types.
    3. No Private Mortgage Insurance (PMI): VA loans do not require PMI, even with a zero or low down payment, potentially saving borrowers money.
    4. Flexible Credit Requirements: VA loans tend to be more lenient when it comes to credit requirements, making them accessible to borrowers with lower credit scores.
    5. No Prepayment Penalty: There are no prepayment penalties with VA loans, allowing borrowers to pay off the mortgage early without incurring additional costs.
    6. Assistance for Disabled Veterans: Veterans with service-connected disabilities may be eligible for additional benefits, including funding fee exemptions and adaptive housing grants.

  • Considerations and Eligibility:

    1. Military Service: To be eligible for a VA loan, you must meet specific military service requirements. Typically, this means you should be an eligible veteran, active-duty service member, or certain members of the National Guard and Reserves. It's essential to verify your eligibility through the U.S. Department of Veterans Affairs.
    2. Funding Fee: VA loans often come with a funding fee, which can vary depending on factors such as the borrower's military category and whether it's the borrower's first VA loan. While some borrowers are exempt from this fee, others will need to factor it into their loan costs.
    3. Loan Limits: VA loan limits can vary by location and may affect your ability to purchase more expensive homes in certain areas.
    4. Property Requirements: VA loans have specific property requirements, including the property's condition and suitability for living. In some cases, certain types of properties, such as investment properties, may not be eligible for VA financing.
    5. Residency: VA loans are intended for primary residence financing, meaning you must intend to live in the home you purchase.
    6. Other Loan Options: It's essential to explore other loan options available to you, such as conventional mortgages, FHA loans, and USDA loans, to determine which one aligns best with your financial goals and circumstances.

In summary, VA loans can be an excellent option for eligible veterans and active-duty service members, particularly if you're looking to purchase a home with no down payment and favorable terms. However, it's essential to carefully assess your eligibility, understand the loan's terms and costs, and compare it to other mortgage options to determine if it's the right choice for your specific situation.

They come with a long list of benefits, including $0 down payment, no mortgage insurance, flexible and forgiving credit guidelines and the industry's lowest average fixed interest rates.

Every Veteran buyer's situation is different, and going over all of your loan options with a Florida’s VA Mortgage Center loan specialist can help ensure you make the best financial decision possible.

Call Florida’s VA Mortgage Center today to get more info and apply for YOUR VA mortgage!
We’re here to help, and we are always only a phone call away!

How do VA loans perform in today's mortgage and real estate environment?

Today, the VA mortgage is more important than ever.

Scores of Veteran and military buyers found it increasingly difficult to get home financing in the wake of the Great Recession.
VA loans have continued to be a popular and viable option for eligible veterans and active-duty service members in the mortgage and real estate market. However, it's essential to keep in mind that market conditions and the performance of different loan programs can change over time. Here's a general overview of how VA loans were performing in the mortgage and real estate environment as of that time:

1. Popularity and Accessibility: VA loans remained a popular choice for veterans and service members due to their unique benefits, including no down payment requirements, competitive interest rates, and no private mortgage insurance (PMI) requirements. These features made homeownership more accessible for many military families.

2. Competitive Interest Rates: VA loan interest rates were generally competitive compared to other loan types, such as conventional and FHA loans. Borrowers with strong credit profiles often secured favorable rates.

3. Low Default Rates: Historically, VA loans have had lower default rates compared to other loan programs, in part because of the VA's stringent underwriting standards and the stable financial situations of many military borrowers.

4. Funding Fee: Borrowers using VA loans typically paid a funding fee, which helps support the VA loan program. The funding fee could be rolled into the loan amount, reducing the need for an upfront payment.

5. Loan Limits: VA loan limits varied by location, allowing borrowers to access financing in a wide range of real estate markets. In some high-cost areas, veterans could purchase relatively expensive homes with a VA loan.

6. Property Requirements: VA loans had specific property requirements, and homes purchased with VA loans were typically intended for primary residence use. The property condition and appraisal were crucial aspects of the loan approval process.

7. Steady Performance: VA loans continued to perform well in terms of delinquency and foreclosure rates. The stable financial situations of many military borrowers contributed to this performance.

8. Eligibility and Documentation: To obtain a VA loan, borrowers needed to meet specific eligibility criteria and provide the necessary documentation, including a Certificate of Eligibility (COE) and proof of military service.

Since conditions in the mortgage and real estate markets can change over time, including interest rates, home prices, and lending standards, it's crucial to consult with a VA-approved lender or a mortgage professional for the most up-to-date information on how VA loans are performing in today's market. Additionally, it's essential for prospective borrowers to consider their own financial situation and homeownership goals when determining whether a VA loan is the right choice for them in the current environment.

VA loans help Veterans and service members become homeowners without having to spend years building great credit or saving for a big down payment. They’ve been a lifeline for younger homebuyers in particular. This hard-earned benefit program continues to fulfill its original mission over eight decades after it began.

How do I get a VA loan?

Talk with a trusted loan at Florida’s VA Mortgage Center that knows VA loans and how to get the most from this hard-earned benefit.
The process starts with getting preapproved, which can often be done in minutes using your phone, laptop or tablet.
Loan preapproval is the first step before making an offer on your dream home.
Having a pre-approval letter gives you a clear sense of your buying power and shows sellers and listing agents you have what it takes to get to closing.

If I've previously used a VA loan, can I use it again?

Yes, this is not a one-time option.
Once you earn the VA loan benefit, it's yours for life. You can reuse the VA loan over and over again, and it's even possible to have more than one active VA loan at the same time.

However, there are some important considerations and limitations to be aware of:

1. Entitlement: When you use a VA loan, you are utilizing a portion of your VA loan entitlement, which represents the VA's guarantee on the loan. Your entitlement is typically based on your military service and the loan limits in your area. If you've fully repaid your previous VA loan, or if you've sold the property and paid off the loan, you can potentially restore your entitlement and use it again.
2. Remaining Entitlement: Your remaining entitlement is the amount of VA loan guarantee you have available for a new loan after accounting for any existing VA loans you may have. To use a VA loan again, you must have sufficient remaining entitlement to cover the new loan. Your lender can help you determine your remaining entitlement.
3. Loan Limits: The VA imposes loan limits on how much you can borrow with a VA loan without making a down payment. These limits are set by the Federal Housing Finance Agency (FHFA) and can vary by location. If you are purchasing a home that exceeds the loan limits for your area, you may need to make a down payment to cover the difference between the loan limit and the purchase price.
4. Funding Fee: When you use your VA loan benefits again, you may be required to pay a new funding fee. The funding fee amount depends on factors such as your military category, down payment (if any), and whether it's your first or subsequent use of the VA loan benefit.
5. Primary Residence Requirement: VA loans are intended for primary residence financing. To use a VA loan again, you should intend to occupy the property as your primary residence. Using a VA loan for an investment property or vacation home is generally not allowed.
6. Loan Approval: As with any mortgage, you will need to meet the lender's credit and income requirements to be approved for a new VA loan.

In summary, it is possible to use a VA loan multiple times if you have sufficient remaining entitlement, meet the loan limits and funding fee requirements, and plan to use the property as your primary residence. If you have questions about your specific situation or need assistance in determining your remaining entitlement, it's advisable to consult with a VA-approved lender or contact the U.S. Department of Veterans Affairs for guidance. They can provide you with personalized information based on your circumstances.

Have questions?
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In addition to the VA Loan, Florida’s VA Mortgage Center is proud to offer several other financing options for homebuyers; including USDA loans, FHA loans, and traditional mortgages.

Just ask if one of these options is better for you!