VA Loans

In 1941, President Franklin D. Roosevelt signed the Servicemen’s Readjustment Act, a bill that became known as the GI Bill of Rights. The bill focused on protecting the welfare of veterans and their families, and it had a huge impact on the home buying world. Under the GI Bill, veterans can obtain financing for their home loan through a special VA program, allowing them one of the most affordable home mortgage options, even if they have no money to put down on the property.


The VA loan program was designed to benefit those who faithfully served the country. Over 25.5 million veterans and active duty service personnel qualify for the loan. In general, any veteran who served a minimum of 90 days of service during wartime or 181 consecutive days during peacetime and was discharged for any reason other than dishonorable discharge qualifies for the VA mortgage program. Some military members must wait two years after their enlistment to apply, and National Guard members must serve for six years under certain criteria to qualify. Surviving spouses of those killed in active duty may also be able to get a VA home loan.

Loan Details

The Department of Veteran’s Affairs does not make home loans. Rather, through the VA home loan program, the VA guarantees up to 25 percent of the home loan’s value, up to a maximum for most applicants of $104,250. This means most veterans can borrow up to $417,000 through the program, although exceptions exist for those who live in high-cost-of-living areas. These loans require no down payment, since they are backed by the government, thus limiting the risk taken by the lender.


Applicants using the VA home loan program must pay the VA funding fee, which is 2.15 percent on a no down payment loan for first-time buyers. The money helps fund the program, reducing the tax burden. Most veterans find that the competitive rates, low closing costs and no down payment option make the VA home loan the most affordable option for their home buying needs, even with the VA funding fee.