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How to Get a VA Loan

What you'll learn: The basic steps to getting your home with a VA loan


VA Loans assist service members, veterans, and their families by making it easier to get into home ownership. We’ll dig deeper into each step throughout this article, but here are the basic steps to getting a VA loan :

  • Ensure that you are eligible for a VA loan.
  • Choose a lender — like PenFed — that specializes in VA loans.
  • Get your Certificate of Eligibility (COE) from the U.S. Department of Veterans Affairs.
  • Apply for your VA loan.

What are the benefits of a VA loan?

The two biggest benefits of VA loans are that they don’t require a down payment and you don’t need to have mortgage insurance — like private mortgage insurance (PMI) or a mortgage insurance premium (MIP). Mortgage insurance helps protect the lender if less than a 20% down payment is made; however, VA loans avoid down payments altogether. The ability to forego PMI or MIP can save you a lot of money over time and reduce your monthly home costs.

  • VA loans require $0 down. When you’re putting together your finances to purchase a home, not worrying about a large chunk of money up front for a down payment can open the door for many new homeowners.
  • VA loans do not require mortgage insurance. As mentioned above, with a conventional loan, you may be required to pay mortgage insurance if you don’t pay at least 20% of the value of your home as a down payment. In some instances, you can end up paying that insurance for the life of your loan.
  • VA loans usually have better rates than other home loans. VA loans typically have better rates than a conventional home loan. VA loans are backed by the federal government, so you’re likely to obtain a better rate than with other home loans.

How do I know if I am eligible for a VA loan?

The U.S. Department of Veterans Affairs is a great place to start to discover the eligibility requirements for a VA loan. You can also apply directly on their site for your COE. Here are some general guidelines for VA loan eligibility:

  • Any veteran who served after August 2, 1990, is eligible if they served for 24 continuous months.
  • Anyone on current active duty is eligible after 90 continuous days of service.
  • National Guard or Reservists who served after August 2, 1990, is eligible after 90 continuous days of active duty service.

What do I need to apply for a VA loan?

To obtain a VA loan, you’ll need a VA COE. In short, here are the requirements to obtain your COE:

  1. You must be a veteran.
    • You’ll need a copy of your discharge papers (DD214).
  2. You must be an active duty service member.
    • You’ll need a statement of your service signed by your commander or personnel officer with the following:
      • Full name
      • Social Security number
      • Date of birth
      • Date you entered duty
      • Duration of lost time in service (if any)
      • Name of the command supplying the information
  3. You must be a current or former activated member of the National Guard or Reserve.
    • You’ll need a copy of your discharge papers (DD214).

What are the fees and costs associated with getting a VA loan?

While lower interest rates and the prospect of no down payment are very attractive, VA loans typically require a funding fee. A funding fee is a one-time payment and can be paid up front or rolled into the cost of the loan.

To get a quick and simple understanding of what to expect from a funding fee, here’s an overview:

  • If your down payment is less than 5%, your funding fee would be 2.3% of the loan.
  • If your down payment is 5% or more, your funding fee would be 1.65% of the loan.
  • If your down payment is 10% or more, your funding fee would be 1.4% of the loan.

You should note that refinance funding fees are different and you may qualify for an exemption of the funding fee altogether when refinancing. It’s always important to speak with a loan specialist to understand if a VA loan is right for you.

To learn more about PenFed VA loans:

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