VA Loan Requirements: Eligibility, Benefits & How to Apply

A VA loan is the strongest mortgage product most eligible borrowers will ever see: zero down payment, no monthly mortgage insurance, and competitive rates backed by a federal guaranty. Here is exactly who qualifies, what it costs, and how to use it.

TL;DR

• Who qualifies: veterans, active-duty service members, most National Guard and Reserve members with 6 years of service, and many surviving spouses.
• Down payment: $0 for borrowers with full entitlement — there is no loan limit for them since 2020.
• Mortgage insurance: none. VA loans replace monthly MI with a one-time funding fee of 1.25% to 3.3%, which can be financed.
• Credit: the VA sets no minimum score; most lenders want 620, some go lower.
• The one document you need: a Certificate of Eligibility (COE), which your lender can usually pull electronically in minutes.

Who is eligible: the service requirements

Eligibility comes from your service history, not your finances. The VA's eligibility rules break down by era and component:

| Service type | Minimum service for eligibility | | --- | --- | | Active duty, wartime era | 90 consecutive days | | Active duty, peacetime era | 181 continuous days | | National Guard / Selected Reserve | 6 years of creditable service, or 90 days of active federal service | | Currently serving active duty | 90 continuous days | | Discharged for service-connected disability | May qualify with shorter service | | Surviving spouse | Spouse died in service or from a service-connected cause (un-remarried, with limited exceptions) |

A discharge "under conditions other than dishonorable" is required. Other-than-honorable discharges are not an automatic bar — the VA reviews them case by case, and a discharge upgrade or VA character-of-service determination can restore eligibility.

Surviving spouses have their own documentation path (VA Form 26-1817 and, where applicable, a Dependency and Indemnity Compensation award letter). We cover that process step by step in our VA loans for surviving spouses guide.

The Certificate of Eligibility (COE)

The COE is the VA's proof that you have entitlement available. Three ways to get it:

1. Through your lender — most VA-approved lenders can pull the COE through the VA's automated system in minutes. This is the normal path.
2. Online yourself — through your account at VA.gov.
3. By mail — VA Form 26-1880 with your DD-214, for cases the automated system can't resolve (common for older service records, Guard/Reserve files, and surviving spouses).

Don't wait on the COE to start shopping. A loan officer can begin pre-approval with your DD-214 or Statement of Service and request the COE in parallel. If the automated pull fails, the manual route typically takes a few weeks — worth starting early if your service history is complicated.

The COE also states your entitlement. Full entitlement means no down payment at any loan amount. Reduced entitlement — because you have another active VA loan, or lost entitlement to a past VA foreclosure or short sale — means the zero-down guaranty only covers you up to the county conforming limit ($832,750 baseline for one-unit homes in 2026, higher in high-cost counties). Check your county with our conforming limit lookup or the FHFA loan limit map.

Credit, income, and DTI standards

The VA publishes underwriting guidance but famously avoids hard cutoffs. What lenders actually apply:

Credit score. No VA-mandated minimum. Most lenders overlay a 620 floor; some specialize in files down to 580. VA pricing is relatively flat across score bands — unlike conventional loans, where Loan-Level Price Adjustments punish scores below 740, a VA borrower at 640 sees pricing much closer to the 760 borrower.

DTI. The VA guideline is 41%, but it is a guideline, not a cap. Files routinely receive automated approval at back-end ratios in the high 40s and above 50% when residual income is strong. See our DTI ratio explainer for what counts in the calculation.

Residual income. This is the VA's distinctive test, and it's why VA default rates stay low despite zero-down lending. After the mortgage payment, taxes, insurance, debts, and estimated utilities and maintenance, the household must have a minimum dollar amount left over each month. The requirement varies by region, loan size, and family size — a family of four in the Midwest on a loan above $80,000 needs roughly $1,003 per month of residual income under the VA's tables. High DTI plus weak residual income is the combination that sinks VA files.

Seasoning after credit events. Typical lender standards: two years after Chapter 7 bankruptcy discharge, one year of on-time payments into a Chapter 13 plan, and two years after foreclosure — all shorter than conventional's waiting periods of four to seven years.

Employment and income. Standard documentation: two years of work history (with flexibility for recently separated service members), W-2s or tax returns, and verifiable stable income. BAH counts as qualifying income for active-duty borrowers.

The funding fee: what zero-down actually costs

VA loans carry no monthly mortgage insurance. Instead, most borrowers pay a one-time funding fee, set by statute and published by the VA:

| Down payment | First use | Subsequent use | | --- | --- | --- | | Zero down | 2.15% | 3.30% | | 5% up to 9.99% down | 1.50% | 1.50% | | 10% or more down | 1.25% | 1.25% |

The fee can be paid in cash at closing, financed into the loan, or covered by a seller credit.

Who pays nothing: veterans receiving VA disability compensation (any rating), veterans eligible for compensation but drawing retirement pay instead, Purple Heart recipients on active duty, and surviving spouses receiving Dependency and Indemnity Compensation. This exemption is worth thousands — if you have a pending disability claim at closing, ask your loan officer about the refund process, because a retroactive award dated before closing can make the fee refundable.

Worked example: VA vs. FHA vs. conventional at $350,000

A hypothetical first-time buyer with a 660 credit score purchases a $350,000 home. Here is how the three programs stack up (illustrative structure — actual rates and MI pricing vary by lender and day):

| | VA (zero down) | FHA (3.5% down) | Conventional (5% down) | | --- | --- | --- | --- | | Down payment | $0 | $12,250 | $17,500 | | Base loan amount | $350,000 | $337,750 | $332,500 | | Upfront fee | $7,525 funding fee (2.15%, financeable) | $5,911 upfront MIP (1.75%, financed) | $0 | | Monthly mortgage insurance | $0 | ~$155 (0.55% annual MIP) | ~$180–$250 (PMI at 660 FICO, 95% LTV) | | MI duration | None | Life of loan at this down payment | Until 78% LTV | | Cash to close (excl. closing costs) | $0 | $12,250 | $17,500 |

Two things stand out. First, the VA borrower keeps $12,000–$17,500 in the bank at closing. Second, the monthly payment gap compounds: no MI means the VA payment runs $155–$250 lower every month than the alternatives at this credit tier, despite the larger financed balance. At a 660 score, conventional PMI is expensive; the VA structure is largely indifferent to the score.

A disabled veteran exempt from the funding fee does even better — the entire $7,525 line disappears. Run your own numbers with our affordability calculator, and see the VA loan program page for current lender requirements.

The VA appraisal and Minimum Property Requirements

VA appraisals are ordered through the VA's assigned-appraiser panel and check the home against Minimum Property Requirements (MPRs): safe drinking water, working heat, a roof with remaining life, no exposed wiring, no peeling paint on pre-1978 homes, adequate access, and structural soundness. Like FHA, this can force repairs before closing on homes in rough condition — and it protects you from buying one.

Two features worth knowing:

• The Tidewater process. If the appraiser expects to come in below the contract price, they must notify the lender before finalizing, giving your agent 48 hours to submit comparable sales. No other loan program has this built-in rebuttal window.
• The Notice of Value (NOV). If the appraisal still comes in low, the VA's escape clause lets you walk away with your earnest money, renegotiate, or pay the difference in cash.

Sellers sometimes view VA offers warily because of MPRs and appraisal stories. In practice, VA loans close at rates comparable to conventional loans, and an experienced VA loan officer can help your agent set expectations with the listing side.

How to apply, step by step

1. Confirm eligibility. Match your service history against the tables above; pull your DD-214 or Statement of Service.
2. Pick a VA-experienced loan officer. VA files reward experience — funding fee exemptions, entitlement math, Tidewater responses, and MPR repair negotiations all go smoother with someone who closes VA loans monthly. Verify any loan officer's license through NMLS Consumer Access before sharing documents.
3. Get the COE and pre-approval together. The lender pulls the COE electronically while underwriting your income and credit.
4. Shop with your pre-approval. Full-entitlement buyers can target any price the income supports — no down payment required, though nothing stops you from putting money down to lower the funding fee and payment.
5. Contract, appraisal, underwriting. The VA appraisal is ordered through the VA portal; typical VA closings run 30–45 days.
6. Close. Review the funding fee line on your Closing Disclosure and confirm any exemption was applied. The CFPB's closing checklist is a good final pass.

VA borrowers also get an unusually cheap refinance path later: the Interest Rate Reduction Refinance Loan (IRRRL) drops the rate on an existing VA loan with minimal documentation, no appraisal in most cases, and a reduced 0.5% funding fee.

Common disqualifiers and how to fix them

• Discharge status issues — apply for a VA character-of-service determination or a discharge upgrade before assuming you're ineligible.
• Entitlement tied up in a prior VA loan — sell and pay off the old loan to restore entitlement, or use remaining "second-tier" entitlement with a possible down payment.
• A past VA loan foreclosure — the lost portion of entitlement stays lost until the VA is repaid, but remaining entitlement can still support a smaller zero-down purchase after the seasoning period.
• Thin credit — VA underwriting accepts nontraditional credit histories (rent, utilities, insurance payments) more readily than conventional; a manual underwrite is possible where automated approval fails.
• Non-occupant plans — VA loans require you to occupy the home as a primary residence, generally within 60 days of closing. Pure investment purchases don't qualify, though buying a multi-unit property (up to four units) and living in one unit does.

Sources & verification

• VA home loan eligibility rules — VA.gov
• VA funding fee and closing costs — VA.gov
• How to request a Certificate of Eligibility — VA.gov
• FHFA conforming loan limit values
• Consumer Financial Protection Bureau — owning a home
• NMLS Consumer Access

Disclosure

MLO Finder is a directory of mortgage loan officers, not a lender. We don't originate loans, set rates, or guarantee approval. Verify any loan officer's current licensing through NMLS Consumer Access before working with them. Information here is educational and not personalized financial advice — consult a licensed loan officer or financial planner for guidance specific to your situation.