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    VA Loan Overview

    What is a VA Loan?

    VA loans are mortgages offered to qualified service members, Veterans, and spouses of deceased service members designed to make it easier to become homeowners. 

    VA loans come from private lenders like banks or independent mortgage companies.  The Department of Veterans Affairs guarantees payment on a portion of the loan, which helps private lenders offer more attractive loan terms to qualified applicants.

    VA loans do not require a down payment when buying a home, and unlike typical mortgages, private mortgage insurance (PMI) is not required on loan balances below 20% equity.  This PMI exemption can save potential homebuyers thousands of dollars over the lifetime of the loan.

    Additional benefits of using a VA loan to finance your home include more lenient credit score requirements, competitive interest rates, no penalty for paying off your mortgage earlier than your anticipated date, and support for struggling borrowers.

    VA loans are not a one-time benefit.  If you apply for the loan to finance your primary residence you can leverage this benefit many times throughout your life.

    Who is Eligible for a VA Loan?

    Your length of service or service commitment, duty status and character of service determine eligibility for specific home loan benefits.  For purchase loans and refinances you must have satisfactory credit, sufficient income to meet the expected monthly obligations, and a valid Certificate of Eligibility (COE).

    Are Active Duty Service Members Eligible for VA Loans?

    Eligibility for active duty service members depends upon whether your rendered service in peacetime or wartime.  In times of peace, you become eligible after you serve 181 days, or six months.  In times of ware, however, your active duty service qualifies you for a VA loan after 90 consecutive days of continuous active duty service.

    Are Reservists and National Guard Eligible for VA Loans?

    If not called into active duty, members of the Reserve and National Guard qualify for a VA loan after six years of service.  If called into active duty, they will qualify once they serve the minimum 181 days of peace or 90 days of war time.

    What are the VA Qualifications for Veterans?

    Veterans who served in the Reserve or National Guard for six or more years are eligible to apply for a VA loan.  Veterans of active service qualify if they served 181 days, or six months during peacetime, or 90 consecutive days, or 3 months, during times of war.

    Are Spouses Eligible for VA Loans?

    Spouses of active duty service members who lost their lives in the line of duty or because of a disability directly related to their service may also qualify for a VA loan. The VA guidelines specify other criteria for eligible spouses.

    These service-related requirements qualify you for loan assistance through the Department of Veterans Affairs.  However, to be eligible for a mortgage, you must meet the underwriting requirements outlined by the specific mortgage lender.  These typically include, but are not limited to adequate credit and enough income to pay your expected mortgage payment.

    What are the Requirements for a VA Loan?

    To qualify for a VA loan you must apply for and present a Certificate of Eligibility as part of your loan application.  You may also apply for this certificate through the Department of Veterans Affairs.  Once you have the certificate you will apply for a VA loan directly through your chosen mortgage lender.  Lenders will analyze the borrower’s credit profile and review credit score to determine credit eligibility for a VA loan. Additionally, you must prove that your income is enough to make the monthly payments accrued through your mortgage financing.

    Mortgage lenders typically require a home appraisal as part of your financing process.  This appraisal is designed to ensure that government funds are being used to finance structurally sound homes.

    Also, you must intend to use your VA loan to finance your primary residence.  Whether you are purchasing a detached single-family home or condo, duplex, or triplex, you must use the home you finance as your primary place of residence.  You may not use a VA loan to finance an investment property or a vacation home.

    There is a one-time funding fee that the VA requires which is financed into the total loan amount.  This fee can range from 1.25% to 3.3% depending on the down payment amount and type of military service.

    Is a Down Payment Required for a VA Loan?

    VA loans do not require a down payment.  VA loans are an especially attractive offer for first-time homebuyers because they eliminate the challenges related to making large down payments.

    What is a VA Appraisal?

    Once you’ve met the requirements requested by your lending company, your future home is required to be appraised by an independent appraiser.  An appraisal is similar to an inspection but, it is less detailed. The VA appraisal’s purpose is to estimate the value of the property. The appraiser is ordered by your mortgage lender to conduct the assessment.  This appraisal is the final step required before your loan will be approved.

    Is There a Prepayment Penalty for a VA Loan?

    There is no prepayment penalty for VA loans. Additionally, Standard Mortgage  (NMLS#: 44912) does not have a pre-payment penalty associated with VA loans.


    Programs & Features of VA Loans:

    • Fixed-Rate
    • Available for detached 1-unit dwellings, eligible condos, and PUD’s
    • Properties must meet VA guidelines and be inspected by VA-approved appraisers
    • One time VA Loan Funding Fee is charged
    • No prepayment penalty
    • No down payment required
    • Out-of-pocket expenses may be gifted, typically from relatives
    • Only eligible veterans and their spouses occupying the subject property may be co-borrowers or co-signers
    • Seller may contribute a maximum of 6 percent of the lower of the sales price or the appraised value


    Mortgage rate options

    Every homebuyer has unique needs. Standard Mortgage strives to meet them with quality service and individual attention. We pride ourselves in giving you the mortgage information, loan options, and convenient assistance you’re looking for, including what to expect when you apply for a mortgage loan. With a variety of loan programs and an established network of lenders behind us, we help you find the loan that best suits your needs and at a competitive rate.

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    Adjustable Rate Mortgages (ARM)

    An adjustable rate mortgage (ARM) is based on a predetermined index and margin, which can go up or down at specified intervals based on the index.

    Conventional Loans

    A conventional loan must meet nationally standardized guidelines, such as income, credit, and property requirements. Loans are subject to amount limits set by Fannie Mae and Freddie Mac.

    Federal Housing Administration (FHA)

    The Federal Housing Administration — commonly referred to as HUD — issues loans that provide affordable mortgages to the average homebuyer.

    Fixed Rate Mortgages

    A fixed-rate mortgage is the most common type of mortgage program. Your monthly payments for interest and principal never change.


    A jumbo loan, or non-conforming mortgage, is for homebuyers who expect to borrow more than $647,200* for single-family residences.

    *this loan amount may vary based on geographic location

    USDA Rural Development

    A USDA Rural Development loan helps rural home buyers purchase a home with no down payment, low fixed rates, simple credit requirements, and the guarantee of the federal government.

    Veterans Administration (VA)

    Veterans Administration loans help veterans — including active duty service personnel and certain categories of spouses — finance the purchase of their homes with favorable loan terms.

    Buying a home can seem like the most complicated financial process in the world, especially if you've never done it before.  

    Standard Mortgage is here to help you navigate the daunting, complicated process that lies ahead. In this eBook, we’ll walk you through the eight steps you’ll have to take before you hold the keys to your new home.


    Home Mortgage Buyer's Guide