Last updated: March 2026
VA Loans: Benefits, Funding Fee, and Eligibility
The VA home loan program is arguably the best mortgage benefit available in the United States. It offers zero down payment, no private mortgage insurance, and typically the lowest interest rates on the market — all as a benefit of military service.
The only required cost unique to VA loans is the VA funding fee. For first-time use with no down payment, it is 2.15% of the loan amount. On a $350,000 home with zero down, that is $7,525 — which is typically rolled into the loan. This fee is far less expensive than the PMI you would pay on a conventional zero-down loan (if one even existed).
The funding fee decreases with larger down payments: 1.5% with 5% or more down, and 1.25% with 10% or more down. Some veterans are exempt from the funding fee entirely, including those with service-connected disabilities and Purple Heart recipients.
VA loan rates are typically 0.25-0.5% lower than conventional mortgage rates. Combined with zero down and no PMI, the monthly savings can be substantial. A veteran buying a $350,000 home might save $300-$500/month compared to a conventional loan with 5% down.
Eligibility requires meeting minimum service requirements: 90 days of active duty during wartime, 181 days during peacetime, or 6 years in the National Guard/Reserves. Surviving spouses of service members who died in service or from a service-connected disability are also eligible.
Frequently Asked Questions
What are the benefits of a VA loan?
VA loans offer zero down payment, no PMI, competitive interest rates (typically 0.25-0.5% lower than conventional), no prepayment penalty, and limited closing costs. They are one of the most powerful homebuying benefits available to eligible veterans and service members.
What is the VA funding fee?
The VA funding fee is a one-time fee paid to the VA to keep the program running. For first-time use with no down payment, it's 2.15% of the loan amount. It decreases with larger down payments (1.5% with 5%+ down, 1.25% with 10%+ down). Subsequent use is 3.3% with no down payment.
Who is eligible for a VA loan?
Active duty service members (90+ days during wartime, 181+ during peacetime), veterans who meet service requirements, National Guard/Reserve members (6+ years or 90+ days activated), and surviving spouses of service members who died in service or from service-connected disability.
Do VA loans have a maximum amount?
VA loans have no maximum loan amount for borrowers with full entitlement. However, lenders still have their own limits. Borrowers with partial entitlement (e.g., from a prior VA loan) may have county-based limits similar to conventional conforming limits.
Can I use a VA loan more than once?
Yes. VA loan entitlement can be reused. If you've paid off a previous VA loan, you can restore your full entitlement. You can even have two VA loans at once with sufficient entitlement. The funding fee is higher for subsequent use (3.3% vs 2.15% with no down payment).
Is the VA funding fee worth it?
In most cases, yes. The funding fee (2.15% first use, ~$6,020 on a $280,000 loan) is typically much less than what you'd pay in PMI on a conventional loan with zero down. PMI on that loan would cost $233/month, totaling over $28,000 before reaching 80% LTV. The funding fee can also be rolled into the loan.