What is a Veterans Administration (VA) Loan?
A VA loan is a mortgage loan that’s issued by private lenders and backed by the U.S. Department of Veterans Affairs. It helps U.S. veterans, active duty service members, and widowed military spouses buy or refinance a home.
VA loans were introduced as part of the GI Bill in 1944, and have grown increasingly popular in recent years. There are no limits on how much you can borrow, but there are limits on what the VA will guarantee.
VA loans don’t require a down payment and have lenient credit and income requirements which is the biggest advantage of using a VA loan. VA loans can only be used for their primary residence. Unlike other low down-payment mortgage options, a VA loan doesn’t require private mortgage insurance. Both FHA and Conventional loans with less than 20% down require PMI, however a VA loan does not.
Every borrower’s situation is different and unique so the best option is always speak to a professional to find out what your options are.