At Newrez, it’s our mission to support Active-Duty Military, Veterans and their families in any way we can – through community outreach, consultation with our Military Family Advisory Council and top-tier loan service. We proudly offer Veterans Affairs (VA) home loans to enable Military and Veteran families to achieve their dreams of homeownership.
VA loans can be a huge benefit to Military borrowers, as they could provide significant cost savings in several ways. This article details VA loan benefits, the qualifying criteria and the application process.
Jump to:
Key Advantages of VA Loans
Determining Your Eligibility
Securing a Certificate of Eligibility (COE)
Applying for a VA Loan
VA Appraisals
VA Funding Fee and Closing Costs
Your Questions, Answered
- No Down Payment: The most prominent benefit to VA loans is that, in most cases, qualified borrowers with full VA loan benefits will not have to make a down payment on their home.
- No Private Mortgage Insurance (PMI): Though PMI is typically required for conventional mortgages where the borrower puts down less than 20%, this does not apply to VA loans.
- Competitive Interest Rates: VA loans often come with interest rates that are lower than traditional mortgages.
- Flexible Credit Requirements: Because VA loans are backed by the government, lenders are able to offer some flexibility when it comes to minimum credit requirements and debt-to-income ratios. The VA doesn’t place minimums on either, so this is up to the discretion of lenders.
Looking for a VA loan? Newrez offers VA loan products with a minimum credit score of 580 for qualified borrowers.
In order to be eligible for a VA loan, you must have served a minimum number of days, depending on various factors. The VA website features a full breakdown of service requirements, but here’s a quick rundown:
- Active-Duty Service Members: If you’ve served at least 90 consecutive days, you meet minimum service requirements.
- Veterans: Service requirements vary depending on when you served (during wartime or peacetime) and the circumstances of your discharge. Veterans who have completed their term of service typically qualify.
- National Guard Members: You meet service requirements if you’ve served 90 days of non-training Active-Duty Title 10 service, or at least 90 days of Active-Duty service including 30 consecutive days, or you have 6 creditable years in the National Guard with honorable discharge.
- Reserve Members: You meet service requirements if you have served 90 days of Active-Duty service, or six creditable years in the Selected Reserve, and you were honorably discharged or placed on the retired list.
- Surviving Spouses: In certain circumstances, spouses of deceased Military members can qualify for a VA loan. Here is the VA’s list of qualifying circumstances for surviving spouses.
Securing a Certificate of Eligibility (COE)
Your eligibility for a VA loan is conditioned upon you getting your COE from the VA.
Gather Necessary Documents: You’ll need documents that prove your service. For Veterans, that will be a copy of your discharge papers. For service members, you’ll need a statement of service signed by your commander or personnel officer. Learn more.
You can request a COE in one of three ways:
- Request a COE Online: You can start the process on the VA’s website here.
- Go Through Your Lender: Lenders experienced in VA loans will be able to help you file your application.
- Apply By Mail: Fill out a Request for a Certificate of Eligibility (available to download on the VA’s website) and mail it to your regional loan center. The address appears on the last page of the form.
If you’re at the start of your house hunting journey, we recommend getting pre-approved** so that you have a clear idea of how much house you can afford. When you’re ready to make an offer on a home, a pre-approval letter shows a seller that you have the financials to back up your offer.
It could benefit you to find a lender that is well-versed in VA loans, as they may be able to streamline the process. Learn about Newrez’s commitment to supporting Military families.
To apply for a VA loan, you’ll need the following documentation:
- Your Certificate of Eligibility
- Verification of Your Income (W-2s, tax returns, Leave and Earnings Statements, paystubs or 1099s if applicable)
- Records of Your Assets (bank statements for checking, savings, retirement accounts and other investments)
- Identification (driver’s license)
Be prepared for your lender to run a full credit check before approval.
The VA requires an official appraisal to confirm the property meets Minimum Property Requirements (MPRs) and the home’s value aligns with the offer price.
- A VA-approved appraiser will assess the property’s condition and value. MPRs ensure the home is safe, sanitary and structurally sound.
- The VA will review the appraisal and issue a Notice of Value. If the property meets VA standards, the loan process can continue. Otherwise, repairs may need to be made or the borrower may search for a more suitable home.
VA Funding Fee and Closing Costs
Depending on your circumstances, you may have to pay a VA funding fee. The VA funding fee keeps the VA loan program operating and can range from 0% to 3.3% of the loan amount. The amount you have to pay could depend on whether you are seeking a purchase or refinance† loan, how much you put down and whether you’ve used your VA benefit before.
You may not have to pay the VA funding fee if you:
- Have a service-connected disability
- You’re a surviving spouse receiving Dependency and Indemnity Compensation
- You have received a Purple Heart
- You have a proposed/memorandum rating stating you’re eligible for compensation because of a pre-discharge claim
You can roll this fee into your loan and pay it off over time, or you can pay it all at once at closing.
Outside of the VA funding fee, you’ll likely have to pay standard closing fees, such as origination fees, discount points, appraisal fees, title insurance and more. You may be able to negotiate with the seller of the property to cover some of these costs.
1. Can I reuse my VA home loan benefit?
If you’ve used your VA home loan benefit before, you can have it restored if you’ve paid back the loan and sold the property. You can also have your benefit restored by selling your home and having a qualified Veteran assume your current mortgage, or you can refinance into a non-VA loan and get a one-time entitlement restoration. If you have remaining entitlement you can use it to purchase a new home, but you may or may not be required to make a down payment.
2. Are there loan limits?
If you have full entitlement, the VA does not put limits on loans that they will guarantee. It will be up to the lender to determine how much they will let you borrow, based on your financial circumstances.
3. What if the home I’m purchasing doesn’t meet Minimum Property Requirements?
You can negotiate with the seller to perform the repairs necessary to meet MPRs, or you can walk away. Alternatively, you can seek non-VA financing. Talk with your lender about your options.
VA Loans Empower Military Homeownership
Here at Newrez, we are committed to serving those who have served our country. Our mortgage experts are glad to guide you through the process of applying for a loan so you can reach your homeownership goals. Reach out today.
This is not a commitment to lend. All loan programs are subject to credit, underwriting, and property approval. Programs, rates, terms and conditions are subject to change without notice. Other restrictions apply.