— WHY VA LOANS

The advantages of VA financing are not superficial. They represent meaningful structural differences that affect what homeownership costs over the life of a loan.

Zero Down Payment
Eligible borrowers with full entitlement may finance 100% of the purchase price. No down payment is required. In markets where home values are elevated and accumulating a 10-20% down payment requires years of savings, this benefit fundamentally changes when and how homeownership becomes achievable.

No Monthly Mortgage Insurance
Conventional loans require private mortgage insurance when the down payment is below 20%. FHA loans carry mortgage insurance for the life of the loan in most cases. VA loans require neither. The elimination of monthly mortgage insurance often represents hundreds of dollars in monthly savings and tens of thousands of dollars over the term of the loan.

Competitive Interest Rates
Because the federal government guarantees a portion of each VA loan, lenders assume a lower degree of risk – and that reduced risk is reflected in the interest rates offered to borrowers. VA loans consistently provide some of the most competitive rate structures available to eligible buyers.

Flexible Credit and Income Guidelines
VA underwriting guidelines are designed to account for the financial circumstances common to military service – career transitions, deployment periods, permanent changes of station, and variable income periods. Qualification standards are more accommodating than conventional financing in meaningful and practical ways.

Limitations on Closing Costs
VA guidelines restrict certain lender fees that may be charged to VA borrowers, reducing out-of-pocket expenses at closing. Sellers are also permitted to cover a broader range of closing costs on VA transactions, which can be structured into an offer.

A Reusable Benefit
The VA loan benefit is not limited to a single use. Eligible borrowers may use the benefit multiple times throughout their lifetime, subject to entitlement availability and program guidelines.

Loan Assumability
VA loans are assumable, meaning a qualified future buyer may take over the existing loan – and its interest rate – upon the sale of the property. In a rising rate environment, this feature can represent a meaningful competitive advantage when selling.

— ELIGIBILITY

— ENTITLEMENT AND LOAN LIMITS

Understanding VA entitlement is essential to understanding the full scope of what this benefit can provide – particularly for purchases in higher-cost markets.

Full Entitlement – No Loan Limits
Effective January 1, 2020, veterans with full entitlement are no longer subject to county loan limits when purchasing with zero down payment, subject to lender guidelines and qualification. Borrowers who have never previously used their VA benefit, or who have had their entitlement fully restored, hold full entitlement and may purchase at any price point supported by their income and credit profile – without a required down payment.

This is of particular significance in high-cost markets – coastal California, Colorado resort communities, the Pacific Northwest, Hawaii, and similar areas – where purchase prices routinely exceed conventional conforming loan limits. Unlike FHA or conventional programs, the VA benefit does not impose a ceiling on eligible loan amounts for borrowers with full entitlement.

Partial or Remaining Entitlement
Borrowers who carry an active VA loan, or who have previously used entitlement that has not been restored, may have remaining entitlement available for use. In these circumstances, county loan limits may influence the zero-down calculation, and a down payment may be required depending on the loan amount and remaining entitlement balance. This determination should be made on an individual basis before drawing conclusions about eligibility.

Entitlement Restoration
Full entitlement may be restored after a VA loan has been paid in full and the securing property has been sold. A one-time restoration is also available for borrowers who retain ownership of the property but have satisfied the VA loan in full.

— THE FUNDING FEE

The VA funding fee is a one-time charge assessed on most VA loans, payable at closing or financed into the loan amount. This fee supports the ongoing operation of the VA loan guarantee program without requiring monthly mortgage insurance or ongoing government appropriations. The applicable fee varies based on the following factors:

• First-time versus subsequent use of the VA benefit
• Down payment amount (larger down payments reduce the applicable fee)
• Service category (regular military versus Reserves or National Guard)

Exemptions Veterans currently receiving VA disability compensation are generally exempt from the VA funding fee. Surviving spouses of veterans who died in service or as a result of a service-connected disability are typically exempt as well.

For borrowers with a disability rating pending at the time of closing, it is important to confirm funding fee exemption status prior to closing. An exemption that is not identified and documented before the loan closes may require additional steps to address after the fact.

— VA JUMBO

VA financing is available for properties across a wide range of price points, including high-value purchases in competitive markets. Eligible veterans with full entitlement may purchase luxury residences, coastal properties, and homes in high-cost metropolitan areas using their VA benefit without a down payment, subject to income qualification and lender approval.

For loan amounts requiring additional structuring above standard VA program thresholds, VA jumbo solutions are available and evaluated individually based on borrower profile, loan amount, and property type. Veterans considering a higher-priced purchase are encouraged to discuss their specific scenario with our team before assuming the benefit cannot be applied at the price point they are considering.

— VA RENOVATION

The VA Renovation Loan combines the purchase price and the cost of approved home improvements into a single VA-backed mortgage. This structure enables eligible veterans to acquire a property at a lower purchase price while financing the cost of necessary or desired improvements — without funding renovations separately after closing.

→ VA Renovation Loan

— VA REFINANCE

VA Interest Rate Reduction Refinance Loan (IRRRL)
The VA IRRRL – commonly referred to as the VA Streamline Refinance – allows eligible veterans to refinance an existing VA-backed mortgage with reduced documentation requirements. In most cases, a new appraisal is not required, income documentation is limited, and the process is designed to deliver a lower interest rate or improved loan structure with minimal complexity.

→ VA Streamline Refinance (IRRRL)

VA Cash-Out Refinance
Eligible veterans may refinance an existing mortgage – whether VA or non-VA – into a new VA-backed loan while accessing available equity. This structure is appropriate for borrowers seeking to consolidate debt, fund home improvements, or address other financial objectives while potentially improving their overall loan terms.

— CONDO CONSIDERATIONS

VA condominium financing requires that the project carry VA approval, which involves review of owner-occupancy ratios, HOA financial standing, and overall project eligibility. In resort communities and vacation destination markets where short-term rental activity and investor concentration are prevalent, meeting VA approval requirements can be more challenging.

When a specific condominium project does not carry VA approval, alternative financing structures may be available depending on the project and the borrower’s circumstances.

→ Buying a Condo
→ PrimeResort™ Condo Financing

— COMPARING OPTIONS

VA vs. Conventional
For eligible veterans, VA financing generally provides superior terms – zero down payment, no mortgage insurance, and competitive or favorable rates. Conventional financing may be the more appropriate structure when the intended use is an investment property, as VA financing requires owner occupancy, or when a specific property type does not satisfy VA eligibility requirements.

VA vs. FHA
FHA financing is a viable alternative when VA eligibility is not available or a property does not meet VA requirements. For eligible veterans, however, VA financing consistently produces better long-term economics – primarily due to the absence of mortgage insurance over the life of the loan.

VA vs. Non-QM
When a veteran’s income structure does not conform to standard documentation requirements – due to self-employment, commission-based compensation, or other non-traditional income arrangements – Non-QM programs may offer an appropriate qualification alternative. Both paths are evaluated before a program recommendation is made.

→ FHA Loan
→ Non-QM Mortgage Programs
→ Portfolio Loans & Flexible Financing Solutions

— COMMON QUESTIONS