What is a VA Loan? The Veteran’s Complete Guide to This Special Type of Mortgage

If you’re on active duty, a military veteran, or the surviving spouse of someone who has served in the military, buying a home could be more affordable than you realize, thanks to the home loan offered by the Department of Veterans Affairs (VA). Although many have taken advantage of this financing option, others still ask, what is a VA loan, and will I qualify for one?

“The whole program is designed to get the veteran that house that she or he wants,” said Robert Greenblatt, a top real estate agent in Cherry Hill, New Jersey, with 17 years of experience who is certified as a Military Relocation Professional. Greenblatt has a few relatives who served in the military and estimates that about one-quarter of his business is assisting clients with VA loans.

Nearly 90% of VA-backed home loans require no down payment, a huge benefit when building, buying, refinancing, or even renovating a home.

However, the misconceptions about this type of loan can scare off borrowers (and even some real estate agents). Those who know these loans inside and out say apprehension can dissuade buyers from many potential savings. “It really is designed to help the veteran become a homeowner or become a homeowner again,” Greenblatt said.

“They can get more than one VA loan in a lifetime, and in some cases, they could have more than one VA loan at a time simultaneously. It’s pretty impressive.”

Let’s explore what makes VA loans unique and how to apply for one if you think this special type of mortgage is right for you.

VA loan basics: How common are these types of mortgages?

When people speak of “VA loans,” they’re technically referring to “VA-backed” or “VA-guaranteed loans.” Private lenders, such as banks and mortgage companies, still provide these loans, but the VA guarantees a portion of the loan, enabling the lender to provide more favorable terms.

In 2023, the share of non-conventional mortgages, which include VA-backed loans, for new home sales represented 32.4% of the market, a slight increase from 28.1% recorded in 2022. In total, VA guaranteed 400,695 home loans with a loan amount of $144.6 billion. Among the borrowers, over 126,000 were first-time homebuyers, while 193,000 were previous homebuyers. Moreover, about 54% of service members and veterans use the VA home loan, and about 28% have used the loan in the past.