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10 Things Most Borrowers Don’t Know About VA Loans


For the vast majority of veteran borrowers, VA loans represent the most powerful lending program on the market. These flexible, no-down-payment loans have helped more than 18 million veterans become homeowners since 1944. But even some longtime VA borrowers aren’t familiar with all the program’s unique benefits and quirks. Here’s a look at home of the key things that veterans and their families might not know about VA loans:

  1. THEY’RE REUSABLE: You can use your full VA entitlement over and over again as long as you pay off the loan each time.

  2. THEY’RE ONLY FOR CERTAIN TYPES OF HOMES: If you’re planning to buy a working farm, a downtown deli or a fixer-upper, the VA loan may not be for you. It’s designed for single family homes in move-in condition.

  3. THEY’RE FOR PRIMARY RESIDENCES ONLY: Don’t bother trying to use your VA loan benefits to buy an investment property or a vacation home. VA loans are for primary residences, with few exceptions.

  4. THEY’RE NOT ISSUED BY THE VA: The VA isn’t in the business of issuing home loans. Instead, the agency provides a guaranty on each qualified mortgage loan.

  5. THEY’RE GUARANTEED BY THE GOVERNMENT: If you have a VA entitlement, the agency guarantees up to a quarter of the loan amount. The guaranty gives lenders confidence and helps service members secure great terms and rates.

  6. THEY’RE AVAILABLE DESPITE FORECLOSURE OR BANKRUPTCY: Veterans with a history of bankruptcy or foreclosure can secure a VA loan. Even borrowers who have had a VA loan foreclosed on can still utilize their home loan benefit.

  7. THEY COME WITH A MANDATORY FEE: All those great benefits come with a cost: the VA Funding Fee. This fee (usually about 2% of the loan amount) helps the VA keep the program going and is required on both purchase and refinance loans. It can be rolled into the loan amount and waived entirely for those with service-connected disabilities.

  8. THEY HAVE LIMITS ON CO-BORROWERS: Some loan programs let you get a loan with just about anybody. That’s not the VA loan program. The only acceptable co-borrower is your spouse or another eligible veteran who will live in the home with you.

  9. THEY DON’T HAVE MORTGAGE INSURANCE: Mortgage insurance is a monthly fee you pay with other programs when your not putting at least 20% down. The VA guaranty eliminates the need for any mortgage insurance premium, helping borrowers save even more money each month.

  10. THEY DON’T HAVE A PRE-PAYMENT PENALTY: You can make extra payments any time you want, saving you a boatload in interest over the life of your loan. You can even structure your payments to deduct a little extra every month automatically. Just an extra $100 per month can shave years and tens of thousands of dollars from the balance.

To learn more about VA loans please contact our recommended lender, Mike Villano, at Veterans United Home Loans. His phone number is 253-686-2491 and his email is

Article taken from the Military & Veteran HomeBuyer of Washington magazine produced by Veterans United Home Loans.


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