20 Surprising VA Home Loan Facts Of 2023

VA loan program is one of the most popular used benefits available to eligible Veterans, military members currently serving in the military, reservists, and surviving spouses (provided to those who do not remarry). 

The VA home loan program, created in 1944, secured the home financing of millions of veteran families and military members.

This easy and no down payment mortgage program was part of the original GI bill signed by President Franklin D. Roosevelt.   

The Major purpose is to provide home financing to worthy veterans and to help them in buying a property, building, or manufacturing new homes with no down payment.

And according to Harvard University, VA loans make up 9.4 percent of all mortgages.

However, despite being one of the most widely used doesn’t mean all eligible service members understand how the VA loan works. 

Below we are going to discuss 17 Surprising VA Home Loan Facts that most eligible veterans and service members don’t know about VA loans. Let’s get started!


1. The VA Loan Is Not Issued By The Department Of Veterans Affairs

Contrary to what most people think, the Department of Veterans Affairs only guarantees the loan; it doesn’t issue the loan.

It assures the lender that a portion of the loan will be covered if the borrower defaults on the mortgage. 

2. Only Selected Properties Are Eligible For The VA Loan

VA Home Loan eligibility

Cooperative societies and vacant lands are not eligible for VA loan benefits. Vacant land is only eligible if it is used with a construction loan concurrently.

Among other properties, modular or manufactured homes are subject to the lender’s approval.   

3. 90% Of Veterans Buy A Home With Little To No Down Payment 

90% of VA buyers get into a home with little to no down payment, and this is the most beneficial thing for the veterans to become owners.

VA also limits the fees veterans have to pay at the time of closing, such as underwriting lender fees.

For insurance and appraisal fees, the buyers can ask the sellers to pay all of their closing costs, totaling up to a maximum of 4% of the purchase price.

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4. Safety Assurance Of VA Loans   

For the last six years, the VA home loan has had the lowest foreclosure rate though it has a $0 down payment.

The VA guidelines and commitments to keeping the veterans in their homes make it the safest model for other mortgage programs.   

5. VA Home Loans Help The Ineligible Buyers   

VA Home Loans Help Ineligible Buyers

After the removal of two years of bankruptcy, eligible service members and Veterans can obtain their VA loans.

Homeowners who experience an uncovered sale may face no waiting period depending on the borrowers and their specific situation. 1

6. You Can Reuse The Benefits Of VA Home Loans   

As long as you pay all your existing loans on time, you are allowed to use the benefits of your VA home loans as many times as you like. 

7. VA Loans Must Be Used To Buy Primary Residences   

These loans cannot be used to buy vacation homes, or an investment property VA sets some residential requirements and considers these properties ineligible.   

8. VA Loans Have A Funding Fee

The funding fee covers the cost of obtaining a VA loan and makes sure that the loan continues to require no down payment and no monthly mortgage insurance.

It usually depends on the type of the VA loan and the amount covered.  

9. While Working Overseas, You Still Get A VA Loan   

overseas va loan

Military members serving overseas can also get VA home loans by granting a power of attorney to a spouse or someone else to sign the documents on their behalf.

However, it comes with a 60-day occupancy rule that only the spouse can satisfy. Otherwise, the borrower is granted a 12-month extension. 2

10. VA Loans Are The Safest Lending Products 

Mortgage Bankers Association survey has declared the VA loan as the safest lending product in the market for more than the last 8-years, with no down payment requirement.  

11. VA Loan Products Are Available In Varieties  

There are several types of loan products to choose from, including refinancing, purchasing, and home construction options up to manufacturing.

Just like a fixed-rate mortgage, you can choose all types of fixed or adjustable rates for VA home loans.

It also offers a streamlined refinance product known as IRRRL, which provides fast transfer from one VA loan to another.   

12. No Pre-Penalty At All  

no Pre-Penalty

If you are planning to pay more than the required amount of monthly mortgage payment.

I was so surprised that some loan options charged you extra if you pay off your mortgage loan early, which is known as a pre-payment penalty. But VA loans don’t have one.  

13. No Private Mortgage Insurance (PMI) In VA Loans

If you don’t put down at least 20%, then you are required to pay mortgage insurance for most conventional loans. However, there is no Private Mortgage Insurance in VA loans. 3

14. National Guard Members Or Reservists Can Apply For VA Loans  

After Six years of national service as a reserve or a guard, you can be eligible for the VA Home Loan service. If you are on active duty, you can earn this benefit faster.  

Here is a procedure for the Guard or reserve members who can earn the eligibility.  

  • Six years of service.  
  • Placed on the retirement list  
  • Honorably discharged  
  • Continue serving in their area.   

But please be sure to check the official website of VA loans if you have any type of query or for more information.   

15. Seven Services Can Avail Of The VA loans Benefits 

VA loans Benefits 

When it’s a matter of VA loan benefits, the first question that comes to mind is who can take advantage of it.

So, the military branches come to mind. But, it’s not true because seven services can take advantage of VA home loans, including:

  • Army 
  • Navy 
  • Air Force 
  • Marines 
  • Coast Guard 
  • National Oceanic Atmospheric Administration (NOAA) 
  • Public Health Service (USPHS) 

But for more details, you should visit the official website of the VA loans. 

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16. You Can Qualify Even If You Have Served Shortly

If you were dismissed early from your service other than the reason is dishonorably, then you can check your eligibility.

Or if you have been discharged from duty due to the issues mentioned below. So, it can be possible to take the benefits from VA Loans. 

  • Hardship 
  • Government convenience 
  • Reduction in force 
  • Certain medical conditions 
  • Service-connected disability 

17. Other People Also Earn The Eligibility 

The most rarely known fact is that not only those seven services, surviving spouses, and national guards’ members can avail the opportunity of this VA loan, but certainly, other members can also be eligible for this.

Some rules can apply, but if you fall into any of these categories, you might be able to get the VA loan.   

18. Low Interest Rates

VA loans are backed by the government. This is the reason why they have very low-interest rates when you compare them with other types of loan options, such as FHA or conventional loans.

19. Flexibility In Debt-To-Income Ratio

The VA allows borrowers to have a DTI ratio below 41%. Some lenders may be willing to go higher if you have a good credit score.

This benefit of VA loans offers flexibility to buyers and increases their purchasing power.

20. Low Credit Requirements

The Department of Veterans Affairs has not set any minimum credit score requirement on borrowers.

VA loans have low credit requirements in comparison to conventional mortgages, and not only this, but they are also lenient for borrowers who are rebounding from foreclosure, bankruptcy, or short sale.

How Do VA Home Loans Work?

VA Home Loans Vs. Conventional Home Loans

VA Home Loans Vs. Conventional Home Loans

There are plenty of differences between conventional and VA home loans. For instance, you need to have a credit score of 620 for a conventional loan.

You may get a VA loan for a lower credit score, however. In a VA loan, you do not need to pay a down payment or any extra fees, which is required in conventional home loans.

VA loans require a VA funding fee at closing, which is not the case with conventional home loans.

All this would make you think that VA loans would cost you cheaper. However, it is only true for lenders who cater to active-duty personnel or veterans.

A 30-year conventional loan is otherwise a little cheaper than a VA loan.

To estimate whether you are benefitting from a VA loan over a conventional loan, make sure to calculate all the expenses associated and compare the two. 4

Pros & Cons Of VA Loans


  • No income restrictions
  • No down payment required
  • No mortgage insurance required
  • Lender fees is 1% of loan amount
  • No loan limits
  • No income verification and no appraisal refinance option available


  • Eligibility based on military service
  • Tough appraisal requirements
  • VA funding fees is up to 3.6% of the loan amount
  • Cannot use it for more than one property
  • Appraisal costs is high

How To Apply For A VA Loan?

Wrapping Up

VA home loans are a great respite for both the buyer and the seller. From low-interest rates, no pre-payment penalties, and many more such benefits, it has a lot to offer.

We hope the facts and information shared in this article on 20 Surprising VA Home Loan Facts Of 2023 were useful to you.


Are VA loans very difficult for the sellers to close?

Earlier the VA rules were quite stringent, making things difficult for the sellers. However, the VA has eased up on the rules now, so VA loans are no longer expensive to close anymore. 5

Do sellers have to pay VA loan costs?

Sellers do not have to forcefully pay the buyer’s mortgage amount. However, if the sellers choose to cover the closing cost for the buyer themselves, then they can pay.

Is a VA home loan inspection very strict?

Yes, VA home inspections are slightly more strict than normal home inspections. For VA loans, appraisers check through a long list of MPRs or minimum property requirements when compared to any other type of home loan.

This process actually protects the buyer from buying a potentially unsafe house. 6

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The National Planning Cycles is committed to producing high-quality content that follows industry standards. We do this by using primary sources, such as white papers and government data alongside original reporting from reputable publishers that were appropriate for the accuracy of information while still being unbiased. We have an editorial policy that includes verifiable facts with due credit given where applicable.

  1. https://www.military.com/money/va-loans/facts-about-va-loans.html[]
  2. https://pacresmortgage.com/knowledge-center/news-insights/va-loan-facts[]
  3. https://www.activedutypassiveincome.com/blog/va-loan-facts/[]
  4. https://www.veteransunited.com/valoans/comparing-va-loans-to-conventional-fha-and-usda-finance-options/#:~:text=VA%20loans%20typically%20have%20lower,which%20limit%20your%20buying%20power.[]
  5. https://thehomeloanexpert.com/are-va-loans-harder-to-close/[]
  6. https://www.veteransunited.com/realestate/how-tough-is-the-va-appraisal-3-factors-to-consider/#:~:text=VA%20appraisal%20guidelines%20can%20be,how%20they%20want%20to%20proceed.[]
  7. https://thehomeloanexpert.com/are-va-loans-harder-to-close/[]
  8. https://www.veteransunited.com/realestate/how-tough-is-the-va-appraisal-3-factors-to-consider/#:~:text=VA%20appraisal%20guidelines%20can%20be,how%20they%20want%20to%20proceed.[]

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