Loan Options for Buying or Refinancing a Home:
VA Loans

How VA loans work

VA loans, like conventional loans, are offered through authorized lenders, such as your bank or financial institution. Lenders typically have less stringent qualification requirements for VA loans since the loans themselves are guaranteed by the VA. That means that if you default on your loan, the VA will step in and cover the lender for the rest of the loan. Therefore, there is little risk to the lender when offering a VA home loan. VA loans are available to former and current military personnel and to some of their surviving spouses.

Advantages of VA loans

VA loans are one of the only home financing options where qualifying borrowers do not need to provide a down payment. Because the loans are backed by the federal government, lenders often offer them at interest rates that are competitive with and even below those offered by conventional loans. That guarantee by the federal government also means that VA loans are easier to qualify for than conventional loans. If you have poor or little credit you may still be eligible for a VA loan. Loan limits are also comparable to conventional home loan limits. In most of the country, VA home limits are currently set at $510,400, but higher in high-priced cities.

Types of Loans