The complete VA home loan guide
You've earned this benefit. Here's everything you need to know to use it — from eligibility and entitlement to closing day.
Why the VA loan is the best deal in mortgage lending
The VA home loan benefit is one of the most powerful financial tools available to veterans, active-duty service members, and surviving spouses. Zero down payment, no private mortgage insurance, competitive interest rates, and flexible credit requirements — no other loan program offers this combination.
Yet many eligible borrowers never use it — either because they don't know they qualify, or because they've heard myths about VA loans being difficult or slow. This guide clears up the confusion and walks you through the process step by step.
Step 01
Confirm your eligibility
VA loan eligibility is based on your service history. Generally, you qualify if you served 90 consecutive days of active duty during wartime, 181 days during peacetime, 6 years in the National Guard or Reserves, or are the surviving spouse of a service member who died in the line of duty or from a service-connected disability. Discharge must be other than dishonorable. Reservists and National Guard members activated under Title 10 orders also qualify.
Key takeaways
When in doubt, apply for your COE — the VA's eligibility determination is definitive
Surviving spouses may qualify even if they've remarried in some circumstances — check with the VA
Pre-discharge programs allow service members to apply for a COE up to 180 days before separation
Step 02
Obtain your Certificate of Eligibility (COE)
The Certificate of Eligibility (COE) is the document that proves to your lender that you qualify for the VA loan benefit. You can obtain it through the VA's eBenefits portal, by mail using VA Form 26-1880, or — most conveniently — your lender can pull it electronically through the VA's automated system in minutes. Most VA-experienced lenders handle this for you as part of the pre-approval process.
Key takeaways
Your lender can usually obtain your COE electronically in minutes — you don't need to do this yourself
If you've used your VA benefit before, your COE will show your remaining entitlement
Keep your DD-214 (discharge papers) accessible — it's needed for COE applications by mail
Step 03
Understand VA entitlement
Entitlement is the dollar amount the VA guarantees on your loan. Basic entitlement is $36,000; bonus entitlement brings the total to 25% of the conforming loan limit. With full entitlement (no prior VA loans outstanding), there is no loan limit — you can borrow as much as a lender will approve. If you have a prior VA loan that hasn't been paid off or had entitlement restored, you have reduced entitlement, which may limit your loan amount or require a down payment.
Key takeaways
Entitlement can be restored after a prior VA loan is paid off — request restoration using VA Form 26-1880
You can have two VA loans simultaneously if you have sufficient remaining entitlement
Bonus entitlement (also called second-tier entitlement) allows loans above the basic limit in most markets
Step 04
Know the VA funding fee
The VA funding fee is a one-time fee paid to the VA to sustain the loan program. For first-time use with no down payment, the fee is 2.15% of the loan amount for regular military and 2.4% for Reserves/National Guard. It decreases with subsequent use and with larger down payments. Critically, the funding fee can be financed into the loan — you don't need to pay it out of pocket at closing. Veterans with a service-connected disability rating of 10% or higher are exempt from the funding fee entirely.
Key takeaways
If you have a pending disability claim, wait for the rating before closing — an approved rating means a refund of the fee
Surviving spouses of veterans who died in service or from service-connected disability are also exempt
Putting 5% or 10% down reduces the funding fee — worth calculating if you have savings available
Step 05
Meet VA property requirements
VA loans are for primary residences only — not investment properties or vacation homes. The property must meet VA Minimum Property Requirements (MPRs), which ensure the home is safe, structurally sound, and sanitary. The VA appraisal is not a home inspection — it's a value assessment with basic condition checks. Always get a full independent home inspection regardless of what the VA appraiser says. Condos must be on the VA-approved condo list; your lender can check this quickly.
Key takeaways
VA appraisals can flag required repairs — budget for these and negotiate with the seller to cover them
Manufactured homes are eligible for VA financing under specific conditions — ask your broker
The VA appraisal protects you from overpaying — if the home appraises low, you can renegotiate or walk away
Step 06
Close your VA loan
VA loans can close in 30 days with an experienced lender. The process mirrors a conventional loan: application, appraisal, underwriting, and closing. One key difference: the VA limits certain closing costs that can be charged to the buyer. The seller can pay all of the buyer's closing costs, and the VA funding fee can be financed. At closing, you may owe little to nothing out of pocket beyond your earnest money deposit — making the VA loan one of the most accessible paths to homeownership available.
Key takeaways
Negotiate seller concessions to cover closing costs — VA rules allow sellers to pay up to 4% in concessions
Don't let sellers or agents talk you out of using your VA benefit — it's a competitive loan in today's market
Work with a lender who does VA loans regularly — experience matters for smooth closings
You've earned this benefit — let's use it.
Jerry and Lisa specialize in VA loans for Colorado Springs veterans and active-duty families. Call us or start your application today.
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