Quick answer
A VA loan is a home loan made by a private lender and partly guaranteed by the U.S. Department of Veterans Affairs for eligible veterans, service members and some surviving spouses. The guaranty lets lenders offer 0% down when the price doesn’t exceed the appraised value, with no monthly mortgage insurance.
Key facts
The guaranty and the funding fee
Instead of mortgage insurance, the VA promises to repay the lender part of any loss — up to 25% of the loan on most loans — through your VA entitlement. In exchange, most borrowers pay a one-time VA funding fee, which can be financed. On a first-use $350,000 loan with less than 5% down, the fee at 2.15% is $7,525. Veterans who receive VA disability compensation, and some others, are exempt.
Who qualifies
Eligibility depends on your service history or status as a surviving spouse; the VA confirms it with a Certificate of Eligibility (COE). The lender still underwrites you: VA uses a debt-to-income guideline of 41% alongside a residual income test, and the home must be your primary residence. The VA loans guide covers the fee table and entitlement in depth.
Related terms
- IRRRL, the VA streamline refinance
Sources
- U.S. Department of Veterans Affairs — VA funding fee, first use, less than 5% down (Apr 7, 2023)
- U.S. Department of Veterans Affairs — VA purchase loan down payment (price at or below appraised value) (Jan 7, 2026)
- U.S. Department of Veterans Affairs — VA guaranty on loans above $144,000 (share of the loan amount) (Aug 12, 2025)
- 38 CFR 36.4340 — VA debt-to-income guideline (higher ratios need documented compensating factors) (Oct 23, 2026)
- CFPB: What is a VA loan?
Last reviewed Figures are checked against the sources above. Read our editorial policy. This page is general information, not financial advice — see the disclaimer.