VA Loan Requirements
Get the most out of your hard-earned benefit with the necessary tools to navigate your VA home purchase or refinance.
Understanding the VA Loan Requirements is the first step toward securing a VA home loan. Veterans and active service members can access exclusive benefits, including no down payment and lower interest rates, by meeting the eligibility criteria. To learn more about the specific requirements and how to qualify, visit the official VA Loan Eligibility page.
1. Eligibility
- Veterans: Served 90 consecutive days during wartime, 181 days during peacetime, or 6 years in the National Guard or Reserves.
- Active-Duty Service Members: Must have served at least 90 continuous days.
- Surviving Spouses: The spouse of a veteran who died in the line of duty or due to a service-related disability may also be eligible.
2. Certificate of Eligibility (COE)
- A COE is required to verify eligibility for the VA loan program. This can be obtained online through the VA eBenefits portal or by asking your lender to help with the application process.
3. Satisfactory Credit
- While the VA does not set a minimum credit score, most lenders typically look for a credit score of 620 or higher. Individual lender requirements may vary.
4. Income and Debt-to-Income Ratio (DTI)
- The VA requires borrowers to have stable income and a debt-to-income ratio (DTI) below 41%. However, lenders can still approve applicants with higher DTI ratios based on compensating factors.
5. Primary Residence
- The home must be your primary residence. VA loans cannot be used to purchase vacation homes or investment properties.
6. VA Loan Entitlement
- VA loans are partially guaranteed by the VA. Borrowers can receive a loan of up to 4 times their available entitlement without needing a down payment, as long as they meet income and credit requirements.
7. Residual Income
- VA requires borrowers to have sufficient residual income after monthly expenses are paid to cover basic needs such as food, transportation, and housing. This ensures that borrowers can meet their obligations beyond their mortgage.
8. VA Funding Fee
- Most borrowers are required to pay a one-time VA Funding Fee. The fee can vary based on the type of service, down payment, and whether the borrower has used a VA loan before. Veterans receiving disability compensation are typically exempt from paying this fee.
These requirements are designed to help veterans and their families obtain housing with favorable loan terms. Each lender may have additional criteria beyond the VA’s requirements.