VA Loans Mortgage Questions

Explore sample VA Loans questions and educational explanations from the RatesQ team.

• VA loan with zero down: what's the real catch?

  I'm a veteran and my buddy told me I can buy with zero down using a VA loan. Is that actually true for any price home? What are the fees and restrictions I should know about?

  It's real. 0% down, no PMI, and competitive rates. The main 'catch' is the VA Funding Fee — for first use with 0% down it's 2.15% of the loan amount (so about $8,600 on a $400k loan). You can roll it into the loan so you don't pay it upfront. If you have a service-connected disability rating, the fee is waived entirely. The other thing is the property must be your primary residence and pass a VA appraisal (which also serves as a condition inspection).

  VA loans are genuinely excellent for eligible borrowers. A few clarifications: the funding fee for subsequent use (if you've had a VA loan before) is higher — 3.3% with 0% down. Putting 5% down drops it to 1.5%, and 10%+ brings it to 1.25%. No loan limit for full entitlement since the 2020 Blue Water Navy Act — meaning no ceiling on the loan amount (though lenders still underwrite to the appraised value and your income). The VA appraisal can be stricter than a conventional appraisal, especially for older homes with deferred maintenance. Plan for that in your inspection contingency.

  One more thing — VA loans also have a cap on closing costs the veteran can pay (you can't be charged for certain fees). Some sellers resist VA offers because of VA appraisal requirements, but in most markets this isn't a dealbreaker. Strong offer terms can offset any seller hesitation.

• Can I use my VA loan benefit more than once?

  I used my VA benefit to buy my first home in 2018 and still have that loan. I'm being relocated and want to buy a new home. Can I use VA again?

  Yes, you can use VA again. There's first-tier entitlement ($36,000) and bonus/second-tier entitlement. Most veterans haven't used up their total entitlement on the first loan. You may be able to get a second VA loan while keeping the first (if you're not selling the original home). The specifics depend on your remaining entitlement — your lender can pull your Certificate of Eligibility (COE) to see exactly what's available.

  VA entitlement works in layers. Your COE will show your available entitlement. If your original VA loan is still outstanding, you may have remaining bonus entitlement for a second loan — usually enough to buy up to the conforming loan limit with 0% down. If the remaining entitlement doesn't fully cover the new loan amount (25% of purchase price), you may need a small down payment to make up the difference. This is common for higher-priced purchases. Get your COE first — it tells you exactly where you stand.