By the HomeAffordLab team · Last updated October 27, 2026
A VA loan lets eligible veterans, service members, and some surviving spouses buy a home with no down payment and no monthly mortgage insurance. Instead, most borrowers pay a one-time VA funding fee of 2.15% of the loan on first use with less than 5% down, which can be added to the loan.
On a $350,000 home with nothing down, the funding fee is $7,525, the loan comes to $357,525, and the full monthly payment is about $2,952 at a 7.32% rate, including property tax and insurance. This guide covers VA loan eligibility, the 2026 funding fee, how VA compares with FHA and conventional loans, and what to watch for.
Key takeaways
- VA loans require no down payment and no monthly mortgage insurance.
- The funding fee is 2.15% on first use with less than 5% down, 1.5% with 5% down, and 1.25% with 10% down. Repeat users pay 3.3% with less than 5% down.
- Veterans receiving VA disability compensation, Purple Heart recipients, and some surviving spouses don’t pay the funding fee.
- The VA sets no minimum credit score, but lenders often look for about 620.
- With full entitlement, there’s no VA loan limit, though lenders still check that you can afford the payment.
In this guide: Who is eligible · VA funding fee 2026 · Loan requirements · Example payment · VA vs. FHA vs. conventional · Entitlement and loan limits · Pros and cons · FAQ
Mortgage Payment Calculator
Your full monthly payment: principal, interest, property tax, homeowners insurance, PMI or FHA mortgage insurance, and HOA dues.
Loan balance and what you pay over time
Each year’s principal and interest, and the balance left at year end.
Year-by-year amortization table
| Year | Principal | Interest | Balance |
|---|
Who is eligible for a VA loan?
VA home loans are guaranteed by the U.S. Department of Veterans Affairs. You may be eligible if you meet the service requirements in one of these groups:
- Veterans who meet minimum active-duty service requirements and were not dishonorably discharged.
- Active-duty service members, usually after at least 90 continuous days of service.
- National Guard and Reserve members who meet service requirements, including those with qualifying active-duty time.
- Surviving spouses of service members who died in the line of duty or from a service-connected disability, in many cases.
You prove eligibility with a Certificate of Eligibility (COE). Most lenders can request it for you online in minutes.
The VA funding fee in 2026
The funding fee helps keep the VA program running for future borrowers. It depends on your down payment and whether you’ve used a VA loan before. According to the VA rates in effect through November 14, 2031:
| Down payment | First use | Subsequent use |
|---|---|---|
| Less than 5% | 2.15% | 3.3% |
| 5% to 9.9% | 1.5% | 1.5% |
| 10% or more | 1.25% | 1.25% |
On a $350,000 purchase, that’s $7,525 on first use with no money down, or $11,550 on a later use with no money down. Putting 5% down cuts the fee to 1.5%, which works out to $4,988 on the $332,500 loan.
VA refinances have their own rates: 2.15% for a first-use cash-out refinance, 3.3% for later use, and 0.5% for an interest rate reduction refinance loan (IRRRL).
Who doesn’t pay the funding fee:
- Veterans receiving, or eligible to receive, VA compensation for a service-connected disability.
- Purple Heart recipients on active duty.
- Surviving spouses receiving Dependency and Indemnity Compensation.
- Service members with a proposed or memorandum disability rating from a pre-discharge claim.
VA loan requirements
| Requirement | VA rule |
|---|---|
| Down payment | None required with full entitlement |
| Credit score | No VA minimum; lenders often require about 620 |
| Debt-to-income ratio | 41% guideline, can be higher if you meet the residual income test |
| Residual income | Money left each month after major expenses must meet VA minimums for your region and family size |
| Property use | Must be your primary residence |
| Appraisal | VA appraisal that checks value and minimum property requirements |
| Mortgage insurance | None |
The residual income test is unique to VA loans. It makes sure you’ll have enough money for food, transportation, and other living costs after paying the mortgage and debts, which is one reason VA loans have historically had low default rates.
Example VA loan payment
For a $350,000 home with no down payment, the funding fee financed, a 30-year rate of 7.32%, 1.0% property tax, and $2,450 a year in insurance:
| Item | Amount |
|---|---|
| Funding fee (2.15%, financed) | $7,525 |
| Loan amount | $357,525 |
| Principal and interest | $2,456 |
| Property tax | $292 |
| Homeowners insurance | $204 |
| Mortgage insurance | $0 |
| Total monthly payment | $2,952 |
VA rates are often lower than conventional rates for the same borrower. At 6.82%, the same loan would cost about $2,831 a month. Enter your own quote in the payment calculator above and set mortgage insurance to zero to model a VA loan.
VA vs. FHA vs. conventional
For the same $350,000 home at the same 7.32% rate:
| VA (0% down) | FHA (3.5% down) | Conventional (3.5% down, 680 score) | |
|---|---|---|---|
| Down payment | $0 | $12,250 | $12,250 |
| Upfront fee | $7,525 funding fee | $5,911 upfront MIP | None |
| Monthly mortgage insurance | $0 | $155 | $276 |
| Full monthly payment | $2,952 | $3,011 | $3,092 |
Even with no down payment, the VA loan has the lowest monthly payment here, because it has no monthly mortgage insurance. If you’re eligible, it’s usually the first loan to price. Our FHA calculator and conventional loan guide cover the other two in detail.
VA entitlement and loan limits
Your entitlement is the amount the VA guarantees to the lender. If you have full entitlement, meaning you’ve never used your benefit or you’ve repaid a past VA loan and sold the home, there’s no VA loan limit. You can borrow as much as a lender will approve with no down payment.
If you have remaining entitlement because a previous VA loan is still active, county conforming loan limits apply to how much you can borrow without a down payment. Above that amount, you may need to put money down. Your lender can calculate this from your COE.
VA loan pros and cons
Pros
- No down payment and no monthly mortgage insurance.
- Often lower rates than conventional loans.
- Flexible credit and debt-to-income standards.
- Limits on certain closing costs the borrower can be charged.
- The benefit can be used more than once.
Cons
- A funding fee of up to 3.3% for borrowers who aren’t exempt.
- Only for primary residences.
- The VA appraisal can flag repairs that need to be fixed before closing.
- Borrowing with no money down leaves little equity if prices fall.
Frequently asked questions
Can I use a VA loan more than once?
Yes. You can reuse your benefit, and in some cases have two VA loans at once if you have remaining entitlement. Later use with less than 5% down carries the higher 3.3% funding fee.
Can the seller pay my closing costs on a VA loan?
Yes. Sellers can pay all of your standard closing costs, and VA rules also allow certain seller concessions of up to 4% of the price, which can cover items such as the funding fee.
Do I need a VA-approved lender?
You need a lender that offers VA loans, which includes most large banks, credit unions, and mortgage companies. Rates and fees vary, so compare at least three.
Is the VA funding fee refundable?
If you paid the fee and are later awarded VA disability compensation retroactive to before your closing date, you may be eligible for a refund. Contact the VA with your loan details.
The bottom line
For eligible borrowers, a VA loan is usually the cheapest way to buy a home: no down payment, no monthly mortgage insurance, and competitive rates. The main cost is the funding fee, 2.15% on first use with no money down, which many disabled veterans don’t pay at all. Get your Certificate of Eligibility, compare quotes from several VA lenders, and run your payment in the calculator above.
Estimates only. HomeAffordLab is not a lender and does not provide financial advice. This page may contain ads. See our Advertising Disclosure.
Sources: U.S. Department of Veterans Affairs: VA funding fee and loan limits · NerdWallet: VA funding fee 2026 · Freddie Mac Primary Mortgage Market Survey