Myth 1
"You need a down payment."
Fact: most eligible Veterans, Service Members and eligible surviving spouses can buy with 0% down.
Here is the part the flyer left off. Zero down holds as long as the sales price is not higher than
the home's VA-appraised value — the value VA's appraiser puts on the house. If you agree to pay more
than the appraisal says the home is worth, you pay that difference in cash out of your own pocket.
In a hot market this is the trap. Bidding $20,000 over asking does not mean $20,000 more loan.
It can mean $20,000 cash at closing. Ask before you bid.
VA's purchase loan page
★ Zero down, up to the appraised value.
Read this first
Surviving spouses — this benefit can be yours
Every flyer I have seen says "Veterans and Service Members" and stops there. That wording
makes widows and widowers put the paper down. Do not put it down.
You may be eligible for the VA home loan benefit if:
- You are eligible for, or currently receive, certain types of VA Dependency and Indemnity Compensation — DIC, the monthly payment VA makes to some survivors
- Your spouse died on active duty or from a service-connected disability
- You are the spouse of an active-duty Service Member who is missing in action or being held as a prisoner of war
Remarried? If you remarried at age 57 or older on or after December 16, 2003, you may still
qualify. And a surviving spouse receiving DIC pays no funding fee at all — see the funding fee card.
Start here: VA home loan eligibility
and benefits.va.gov home loan eligibility.
★ If you are a survivor, you are in this.
Step one
Get your Certificate of Eligibility
The COE is the paper that proves to a lender you have this benefit. Nothing starts without it.
Surviving spouses, do not stop at that form number. Form 26-1880 is the Veteran's and Service
Member's form. A different route applies to you, and it exists. Use the eligibility page above, or ask
VA or your lender which form fits your situation. A form number printed too narrowly is the reason
people who qualify never file.
★ COE first. Then shop.
Myth 2
"You only get to use it once."
Fact: you can use the VA home loan benefit more than once — if you have remaining entitlement,
or you restore your entitlement.
Entitlement is the dollar amount of your loan VA guarantees. Basic entitlement is $36,000.
When a VA loan is paid off, that entitlement can come back to you.
The one-time restoration most people never hear about. VA's own words: "On a one-time only basis,
you may have your eligibility restored if your prior VA loan has been paid in full but you still own the
property." You keep the house and get the benefit back — once.
It is not automatic. Restoration happens because you request it. Work it through your lender or
through VA directly, starting at
benefits.va.gov/homeloans/eligibility.asp.
Do not mail anything to an address printed on an old handout — offices and addresses change. Confirm
where it goes before you send it.
★ Earned once. Usable again.
Myth 3
"VA requires a certain credit score."
Fact: VA does not set a minimum credit score. Individual lenders set their own.
So when a loan officer tells you "you need a such-and-such score," that is that company's rule, not the
law and not VA's. If one lender says no, another lender may say yes on the same file. Shop it.
Ask every lender the same two questions: What is your own minimum score for a VA loan, and how many VA
loans did you close last year?
★ A lender's cutoff is not a VA rule.
Myth 4
"VA loans take forever to close."
Fact: the official number does not show VA loans being slower.
I will give you this one exactly as straight as I have it. The newest figure VA has published on this
is old — VA data from March 2015. It showed VA purchase loans closing in about the same number of
days as conventional loans, and being more likely to close at all: 70% of VA purchase
applications closed, against 67% conventional and 61% FHA.
I will not tell you VA is faster. I have seen no official VA figure that says so. Anyone who tells
you VA loans are slower — or faster — is going past what VA publishes.
Your real lever is the lender. Pick one that closes VA loans every month and ask them for their own
average days to close, in writing.
★ Same days. Better odds of closing.
Myth 5
"You cannot build a house with it."
Fact: eligible Veterans may use a VA construction loan through participating lenders to build a new home.
True — and harder than the flyer makes it sound. Expect stricter qualification, much more
documentation, and upfront out-of-pocket costs before you buy the land. The VA guaranty is not issued
until the final compliance inspection is approved.
Few lenders offer this product. Find the lender before you commit to a piece of land. Do not
assume "0% down" carries over to building.
VA on construction loans
★ It exists. Line up the lender first.
Myth 6
"You must sell your house before you can use it again."
Fact: depending on your remaining entitlement and lender qualification, you may be able to
buy another primary residence without selling your current one.
A second VA loan is usually NOT zero down. Your entitlement plus any down payment generally has to
cover 25% of the new loan. With full entitlement there is no VA loan limit — only what your lender
will approve. With only remaining entitlement, your county loan limit applies, and anything
above it may require a down payment in cash.
Ask your lender to put your remaining entitlement in numbers before you write an offer, so nobody
surprises you with a cash demand at the closing table.
VA loan limits
★ Know your remaining entitlement first.
Myth 7
"Sellers will not accept a VA offer."
The flyer I was handed cut off mid-sentence here. This is the rest of it.
The honest answer is not a slogan about how much sellers love VA buyers. It is the data above: by VA's
2015 figures, VA-backed purchase applications closed more often than conventional or FHA and took about the
same number of days. Have your agent say that plainly in the offer, and bring a real pre-approval.
Your escape clause — know this before you sign anything. Every VA-financed purchase contract must
contain this language: "The purchaser shall not incur any penalty by forfeiture of earnest money or
otherwise be obligated to complete the purchase of the property described herein, if the contract purchase
price or cost exceeds the reasonable value of the property established by the Department of Veterans
Affairs." Plain English: if the VA appraisal comes in below your contract price, you can walk away and
keep your earnest money.
Do not let anyone strike that clause from your contract. Not the seller, not an agent, not a
lender. That is your money protected.
★ Bring the clause. Keep the clause.
The money
The VA funding fee — nobody put this on the flyer
Zero down does not mean free. There is a one-time fee, and it is the biggest thing that
sheet left out.
Effective April 7, 2023, on a purchase loan with less than 5% down the funding fee is
2.15% of the loan amount on first use and 3.3% on every use after that. On a $300,000 loan
that is roughly $6,450 the first time and $9,900 the next time.
That second number matters most to anyone reusing the benefit. Rates and charts change. Check what
is in effect the day you close on
VA's own funding fee page
— not on a flyer, not on mine.
★ Ask the number before you sign.
Money back
Who pays no funding fee at all
Some people owe nothing. Veterans who did not know this have paid thousands of dollars they never owed.
- Veterans receiving VA compensation for a service-connected disability
- Veterans eligible to receive that compensation but taking retirement or active-duty pay instead
- Surviving spouses receiving DIC
- Service Members with a pre-discharge proposed or memorandum rating
- Active-duty members who received a Purple Heart
Already paid it and you were exempt? If you were charged the fee in error, you can request a
refund. Start at
VA's funding fee page
and raise it with your lender and VA.
★ Check the exemption. It is real money.
Two more rules
No PMI — and you must live in the home
No private mortgage insurance. VA's own words: "No need for private mortgage insurance (PMI) or
mortgage insurance premiums (MIP)." On a conventional low-down-payment loan that insurance protects the
lender, not you, and you pay for it every month. VA has put the saving at more than $200 a month
compared with an FHA loan. Over years, that is larger than anything else on this page.
Occupancy. You must certify you will live in the home. A VA-backed loan cannot be used to buy a
rental or an investment property. That applies to the second-home case too — it has to be your
primary residence.
VA purchase loan details
★ Save the PMI. Live in the house.
If you fall behind
Call VA before you call the servicer
This is not on any lender flyer, and it is the one that saves homes.
If you are behind on payments or about to be, VA loan technicians work with Veterans directly. They can
help with special forbearance, a repayment plan, a VA loan modification, 30- and 40-year modifications, and
the VA Partial Claim.
Call early. Options are wider before the missed payments stack up.
★ One phone call, before it gets away from you.
Watch out
The mail that looks official and is not
VA and the Consumer Financial Protection Bureau have both warned Veterans about this.
- Official-looking mailers using government seals, colors, or a fake case number
- Refinance offers with urgent deadlines, "skip two payments," or cash-back promises
- Anything charging you a fee to get your COE or to "check your benefits"
VA does not solicit you by mail to refinance. If a piece of mail makes you feel rushed, that is the
tell. Put it down and start at VA.gov instead.
VA on misleading advertising
★ Nobody charges you for what you earned.