Veterans Day is November 11, and November is widely observed as National Veterans and Military Families Month. It's a good time to say thank you, and a good time to make sure you know the full value of the home loan benefit you earned through your service.
Most Veterans know a VA loan can mean buying with no down payment. Far fewer know about the rest. Here are the benefits our team sees Veterans miss most often.
1. You may not owe the VA funding fee at all
The VA funding fee is a one-time charge on most VA loans, and it's often the largest single cost at closing. Under VA rules, you don't pay it if any of these apply:
- You receive VA compensation for a service-connected disability
- You're eligible for that compensation but receive retirement or active-duty pay instead
- You have a proposed or memorandum rating before closing that shows you're eligible for compensation
- You're a surviving spouse receiving Dependency and Indemnity Compensation (DIC)
- You're on active duty and provide evidence of a Purple Heart on or before closing
The exemption needs to show on your Certificate of Eligibility (COE), so check it early. If VA later awards you compensation with an effective date before your closing date, you may be eligible for a refund of the funding fee.
2. You can use your benefit more than once
Your VA home loan benefit isn't a one-time deal. Under VA rules, entitlement used on a past loan can be restored:
- Sell and pay off. Sell the home and pay off the VA loan, and your entitlement can be restored. There's no limit on how many times you can do this.
- One-time restoration. Paid off your VA loan but kept the home, for example by refinancing into another loan type? You can request restoration once while keeping the property.
- Substitution. If another eligible Veteran assumes your VA loan and substitutes their entitlement, yours can be freed up.
Restoration isn't automatic; it has to be requested. Even without restoring, you may still have remaining entitlement to buy again. With full entitlement, there's effectively no VA loan limit, and you qualify based on your income. The county loan limit only comes into play when you're using partial entitlement.
3. Your benefit can build a home, not just buy one
A VA construction loan lets you finance the land and the build in one loan with one closing. When the home is done, the loan becomes your permanent mortgage, with no second closing.
VA rule: the builder must be approved by the lender before closing. Our team starts the builder approval review early, ideally before you sign a build contract.
Our team's lending standards: VA construction loans are available in the 48 contiguous states and D.C., with $0 down up to $1 million (5% down above $1 million) and a 620 minimum credit score.
Planning to improve a home instead? A VA renovation loan can roll repair and improvement costs into your purchase or refinance. Our team's lending standard: 600 minimum credit score.
4. Your credit score and debt ratio may matter less than you think
VA rule: VA doesn't set a minimum credit score, and it looks at residual income, the money left each month after major expenses, alongside your debt ratio. A higher debt ratio doesn't automatically disqualify you when your residual income is strong.
Our team's lending standards: there's no minimum credit score on VA purchase and refinance loans with our team. Applications are reviewed to VA credit guidelines, and only a soft credit pull is done when you apply.
5. The seller can help with your costs
VA rule: there's no VA limit on a seller paying your normal closing costs. Separately, sellers can provide concessions of up to 4% of the home's value, which can go toward things like paying down your debts to help you qualify.
Frequently asked questions
Do I have to be a first-time buyer to use a VA loan?
No. You can use your VA benefit again, and in some cases have more than one VA loan at a time, depending on your remaining entitlement.
Can surviving spouses use the VA home loan benefit?
Yes, certain surviving spouses are eligible, and those receiving Dependency and Indemnity Compensation (DIC) are exempt from the funding fee. Eligibility rules apply, and your Certificate of Eligibility confirms it.
Does a 10% disability rating count for the funding fee exemption?
VA bases the exemption on receiving compensation for a service-connected disability, not on a specific percentage. If you receive compensation, you're exempt.
Will checking my eligibility hurt my credit?
No. Checking your eligibility doesn't affect your credit, and the application uses a soft credit pull.
See what your benefit can do
This Veterans Day, thank you for your service, and for the service of your family. If you'd like to know exactly what your benefit can do, check your eligibility or book a 15-minute call. Our team reviews every application. If you qualify, you'll get a pre-approval letter and a full itemized estimate. If you're not there yet, you'll get a clear plan forward.
