VA loans require no down payment at all
A VA loan is a mortgage backed by the Department of Veterans Affairs. The defining feature is that you do not need to put money down to buy a home — the VA guarantees a portion of the loan to the lender, which removes the lender's risk and eliminates the down payment requirement.
This is different from conventional loans, where most lenders require 3 to 20 percent down. With a VA loan, you can finance 100 percent of the home's purchase price, meaning you walk to closing with no down payment.
The catch is that you must be a current or former service member, National Guard member, or surviving spouse of someone who died in service or from a service-connected condition. The VA issues a Certificate of may be able to access that proves your status to the lender.
Key Takeaways
- VA loans require zero down payment — you can finance the entire purchase price if the lender approves you.
- You must have a Certificate of may be able to access from the VA, which you request through the VA website or by mail.
- The VA charges a one-time funding fee (usually 2.3 percent of the loan amount for first-time users) unless you are exempt due to disability or other reasons.
- You still need to meet the lender's income and credit requirements, and the home must pass a VA appraisal.
- Some sellers or lenders may ask you to cover closing costs out of pocket, but VA rules allow the seller to pay them on your behalf.
How the VA funding fee works instead of a down payment
Because you are not putting money down, the VA charges a funding fee — a one-time cost added to your loan amount. This fee compensates the VA for the risk it takes by guaranteeing the loan.
For a first-time VA loan user, the funding fee is typically 2.3 percent of the loan amount. If you are buying a $300,000 home with no down payment, the funding fee would be roughly $6,900, rolled into your mortgage. Second-time users and those buying investment properties pay higher fees — usually 3.6 percent.
You are exempt from the funding fee if you receive VA disability compensation or if you are a surviving spouse of someone who died in service. If you are exempt, you pay nothing extra — the loan truly costs zero down.
The funding fee is not the same as mortgage insurance. With a conventional loan, mortgage insurance protects the lender if you default; with a VA loan, the funding fee is a one-time charge that the VA keeps, and there is no ongoing insurance premium.
What you still need to bring to closing
Even though you have no down payment, you will have closing costs — fees for the appraisal, title search, recording, and the lender's processing. These typically run 2 to 5 percent of the purchase price.
VA rules state that the seller can pay your closing costs on your behalf. Many sellers do this as part of the negotiation, especially in a buyer-friendly market. If the seller will not cover them, you will need to bring cash to closing.
You will also need proof of funds in your bank account — lenders want to see that you have money available, even if you are not using it for a down payment. This shows you can handle an emergency repair or property tax bill.
The Certificate of may be able to access and how to get it
Before a lender will approve a VA loan, you must provide a Certificate of may be able to access (COE). This document proves to the lender that the VA has verified your service and that you meet the basic requirements.
You can request a COE online through the VA's website (va.gov), by mail, or through your lender — many lenders can request it on your behalf. The online process is fastest and usually takes a few days. If you explore by mail, allow two to four weeks.
You will need your Social Security number and military discharge papers (your DD Form 214 or equivalent). If you are still on active duty, you can use your military ID number instead.
Once the VA issues your COE, it does not expire. You can use it for multiple VA loans throughout your life, so keep a copy in a safe place.
Income and credit requirements still explore
The VA does not set a minimum credit score or income level — that is up to the individual lender. However, most lenders require a credit score of 620 or higher, and some prefer 640 or above.
You will need to show stable income for the past two years. If you are self-employed, the lender will ask for tax returns. If you are on disability, Social Security, or military retirement, that counts as income.
The lender will also look at your debt-to-income ratio — the percentage of your monthly income that goes to debt payments. Most lenders want this to be 41 percent or lower, though some go as high as 50 percent for strong borrowers.
Having no down payment requirement does not mean the lender will approve you automatically. You still have to prove you can repay the loan.
The home must pass a VA appraisal
The VA requires an appraisal to make sure the home is worth what you are paying for it. This is different from a home inspection — the appraiser is checking value, not condition.
The VA appraisal also includes a VA Minimum Property Requirements check. The home must be safe, sanitary, and structurally sound. If the inspector finds major problems — a roof that is failing, unsafe wiring, or a foundation issue — the VA will not may provide the loan until those are fixed.
The seller is responsible for paying the appraisal fee, which is usually $400 to $600. If the appraisal comes in lower than the purchase price, you have options: renegotiate the price, make up the difference in cash, or walk away.
When you might want to put money down anyway
Even though you do not have to, some borrowers choose to put money down on a VA loan. This is usually a strategic choice, not a requirement.
Putting money down reduces the loan amount, which lowers your monthly payment and the total interest you pay over the life of the loan. It also eliminates the funding fee on the amount you put down.
If you have cash available and want to reduce your monthly payment, putting down 5 to 10 percent is an option. But if you do not have extra cash or prefer to keep it for emergencies, the zero-down feature of a VA loan means you do not have to.
Frequently Asked Questions
Can I use a VA loan to buy a second home?
Yes, but the rules change. Your first VA loan can be used once and then restored if you pay it off. For a second VA loan, you will pay a higher funding fee (3.6 percent instead of 2.3 percent) and the home must be your primary residence. You cannot use a VA loan to buy an investment property or vacation home.
What if I do not have my discharge papers?
You can request a copy from the National Archives or through your military branch's records office. The VA can also help you locate them. You will need them to get your Certificate of may be able to access, so order them early if you are planning to buy.
Do I have to use a VA loan if I am may be able to access?
No. You can use a conventional loan instead if you want to. Some borrowers do this if they have a large down payment saved and want to avoid the funding fee, or if they are buying a property the VA will not approve. But if you have no down payment saved, a VA loan is usually the better choice.
Can my spouse use my VA loan benefit?
Only a surviving spouse of someone who died in service or from a service-connected condition can use the benefit. A current spouse cannot use an active service member's benefit — only the service member can.
What happens if the appraisal comes in low?
If the home appraises for less than the purchase price, you can ask the seller to lower the price, pay the difference yourself, or cancel the contract. The VA will not may provide a loan for more than the appraised value, so one of these options must happen before closing.