VA Loans

Date of Last Revision: August 8, 2026

A VA loan is a mortgage backed by the U.S. Department of Veterans Affairs and issued by private lenders. It helps eligible veterans, active-duty service members, and select military spouses buy a home or refinance with major advantages like zero down payment, no private mortgage insurance (PMI), and competitive interest rates. When refinancing, you can take advantage or a cash out option or an interest rate reduction refinance loan (VA IRRRL) often called a VA Streamline.

Key Benefits

  • No down payment: 100% financing is available for most buyers.

  • No monthly mortgage insurance (PMI): Saves money compared to conventional or FHA loans.

  • Lower interest rates: Typically more competitive than standard conventional mortgage rates.

  • Capped closing costs: The VA limits what lenders can charge in fees.

Basic Eligibility Requirements

  • Military service: Must meet specific active-duty or reserve/National Guard service duration rules.

  • Certificate of Eligibility (COE): Official proof of qualification from the Department of Veterans Affairs.

  • Occupancy: The home must be for your own personal primary residence.

Main pillars of the VA home loan benefit

  • No down payment required 
    (*Note: Lenders may require down payments for some borrowers using the VA home loan guaranty, but VA does not require a down payment)

  • Competitively low interest rates

  • Limited closing costs

  • No need for Private Mortgage Insurance (PMI)

  • The VA home loan is a lifetime benefit: you can use the guaranty multiple times

VA IRRRL / VA Streamline Key Features & Benefits

  • Lower Payments: Refinance to secure a lower interest rate.

  • Rate Stability: Switch from an adjustable-rate mortgage (ARM) to a fixed-rate loan.

  • Less Paperwork: Generally requires no home appraisal, no income verification, and no credit underwriting package.

  • No Out-of-Pocket Need: Closing costs and the 0.5% VA funding fee can be rolled directly into the new loan amount.

Basic Requirements

  • Must be a VA-to-VA refinance (your current loan must already be a VA loan).

  • You must certify that you currently live in or previously lived in the home.

  • Typically requires a history of on-time mortgage payments.

Funding Fee Exemption

You do not have to pay the VA funding fee if you receive VA disability compensation, get retirement pay instead of disability, receive Dependency and Indemnity Compensation as a surviving spouse, have a pre-discharge memorandum rating, or are an active-duty service member with a Purple Heart.

Who Qualifies for an Exemption

  • Service-connected disability: Any rating level qualifies.

  • Retirement or active pay: Eligible for disability, but taking retirement pay instead.

  • Surviving spouses: Receiving Dependency and Indemnity Compensation (DIC).

  • Pre-discharge claims: Holding a proposed or memorandum rating before closing.

  • Purple Heart recipients: Active-duty service members with proof of the award.

How to Confirm Your Status

  • Check your COE: Your exemption status usually appears on your Department of Veterans Affairs Certificate of Eligibility.

  • Provide documentation: Give your lender your VA rating decision letter or active-duty Purple Heart proof before your loan closes.

  • Retroactive refunds: If your disability rating is approved after closing with an effective date before your closing date, you can request a fee refund.

Refinance Seasoning

VA refinance seasoning is the mandatory waiting period you must complete before refinancing an existing VA loan. You must wait at least 210 days from the first payment due date of your original loan and make at least six consecutive monthly payments before closing on a new VA refinance.

Core Seasoning Rules

  • Time Requirement: At least 210 days must pass after your very first mortgage payment was due.

  • Payment Requirement: You must successfully make six consecutive, on-time monthly payments on the active loan.

  • The "Later of" Rule: The closing date of your new refinance must fall on or after whichever of the two milestones above happens last.

Loan Types and Exceptions

  • VA IRRRL (Streamline): The 210-day/six-payment rule strictly applies to all Interest Rate Reduction Refinance Loans.

  • VA Cash-Out Refinance: If you are refinancing an existing VA loan into a cash-out loan, seasoning rules apply. If you are refinancing a non-VA loan (like a conventional or FHA mortgage) into a VA cash-out loan, the VA itself does not mandate a waiting period, though Ginnie Mae guidelines or individual lenders may still enforce 6-month overlays.

  • Purpose: These rules prevent predatory "loan churning," where lenders repeatedly flip a borrower into new loans just to collect extra closing fees.