VA loans do not require a down payment
A VA loan is a mortgage backed by the Department of Veterans Affairs that lets you buy a home with zero down. You can borrow the full purchase price, which means you do not need to save a lump sum before you close. This is one of the largest advantages VA loans hold over conventional mortgages, where lenders typically ask for 3 to 20 percent down.
The catch is that you must be a current or former service member, National Guard member, or surviving spouse of someone who died in service or from a service-related injury. You also need a Certificate of may be able to access from the VA, which proves to the lender that you may have access to for the benefit. Without that certificate, the zero-down feature does not apply.
Key Takeaways
- VA loans require no down payment at all — you can borrow 100 percent of the home's purchase price if the lender approves you.
- You must have a Certificate of may be able to access from the VA, which you request through VA.gov or by mail, before a lender will offer you a VA loan.
- You still pay closing costs, which typically run 2 to 5 percent of the loan amount, though the seller can pay some or all of them in a VA transaction.
- The VA guarantees a portion of the loan to the lender, which is why lenders accept zero down — the may provide protects them if you default.
- If you have less-than-honorable discharge, you may not may have access to, and you should contact the VA directly to learn your status.
How the VA may provide replaces a down payment
A down payment serves one purpose from the lender's perspective: it reduces their risk. If you put 20 percent down and the home value drops, the lender still has a cushion. With a VA loan, the VA itself provides that cushion by guaranteeing a portion of the loan amount to the lender.
The may provide amount varies by the loan size and the year the loan was made, but it typically covers 25 percent of the loan or a fixed dollar amount, whichever is less. If you stop paying and the home sells for less than you owe, the VA pays the lender the difference up to the may provide limit. That protection is why lenders will lend you the full purchase price without asking you to save first.
You do not pay the VA directly for this may provide. Instead, most VA borrowers pay a one-time funding fee at closing, which ranges from 1.4 to 3.6 percent of the loan amount depending on whether you have a disability rating and whether this is your first VA loan. Some borrowers — those with a service-connected disability rated by the VA — are exempt from the funding fee entirely.
Getting your Certificate of may be able to access
Before any lender will offer you a VA loan, you need proof that the VA says you may have access to. That proof is your Certificate of may be able to access, a one-page document the VA issues to you.
The fastest way to get it is through VA.gov. Log in with your VA credentials or create an account, go to the VA Loan COE tool, and request it online. The VA typically sends it to your email within minutes. If you do not have online access or prefer mail, you can submit VA Form 1880 by post to your regional VA office, which takes one to two weeks.
Once you have the certificate, give it to your lender when you start the mortgage process. The lender uses it to confirm your may be able to access and to calculate the may provide amount. If you lose the certificate, you can request another one at any time — there is no limit to how many times you can get a new copy.
Closing costs still apply, even with zero down
A VA loan does not require a down payment, but you still owe closing costs. These are the fees charged by the lender, title company, appraiser, and other parties involved in the sale. Closing costs on a VA loan typically run 2 to 5 percent of the loan amount.
On a $300,000 home, closing costs might be $6,000 to $15,000. You have three options: pay them out of pocket, roll them into the loan (which increases your monthly payment), or ask the seller to cover them. VA loans allow sellers to pay up to 4 percent of the purchase price toward your closing costs and prepaid items, which is more generous than most conventional loan rules.
The one cost you cannot roll into the loan is the VA funding fee, which must be paid at closing. However, if you have a service-connected disability rating, you are exempt from the funding fee, which can save you thousands of dollars.
Loan limits and how much you can borrow
The VA does not set a maximum loan amount, but most lenders do. The limit depends on your county and changes each year. In 2024, the baseline may provide is $36,000, which means lenders will typically lend you up to about $766,200 without requiring a down payment, though this varies by location and lender.
If you want to borrow more than your county's limit, you can still use a VA loan — you just have to put down the difference between the VA's may provide and the amount you want to borrow. For example, if your county limit is $766,200 and you want to buy a $900,000 home, you would need to put down roughly $134,000 to stay within the may provide.
Your lender will tell you your specific county limit and how much you can borrow without a down payment. You can also check your county's limit on the VA's website before you start shopping.
Discharges that disqualify you from VA loans
Most service members and veterans may have access to for VA loans, but your discharge status matters. If you received an honorable or general discharge, you may have access to. If you received a discharge marked "other than honorable," "bad conduct," or "dishonorable," you do not may have access to for a VA loan unless the VA grants you a waiver.
If you are unsure of your discharge status, contact the VA at 1-888-442-4551 or visit VA.gov to check. The VA can sometimes overturn a discharge or grant a waiver if there are extenuating circumstances. Do not assume you are ineligible — the VA reviews each case individually.
What happens if you want to put money down anyway
You are not required to put down a down payment with a VA loan, but you can choose to. Some borrowers put down 5 or 10 percent to lower their monthly payment or to reduce the amount they owe if the home value drops.
If you do put money down, your lender will still charge the VA funding fee on the full loan amount (unless you are exempt due to disability). Putting down money does not reduce the funding fee, so the math often does not work in your favor. Most VA borrowers skip the down payment and use their savings for closing costs or to build an emergency fund instead.
Frequently Asked Questions
Can I use a VA loan to buy a second home or investment property?
No. VA loans are for primary residences only — the home you plan to live in. You cannot use a VA loan to buy a vacation home, rental property, or second residence. You can use your VA benefit again after you sell a home you bought with a VA loan, but only to purchase another primary residence.
What if I was dishonorably discharged?
A dishonorable discharge disqualifies you from VA loans. However, you can request a review or waiver from the VA if you believe the discharge was issued in error or if there are circumstances the military did not consider. Contact the VA at 1-888-442-4551 to discuss your options.
Do I lose my VA loan benefit after I use it once?
No. Your VA loan benefit does not expire or disappear after one use. You can use it multiple times throughout your life to purchase different primary residences. Each time you sell a home bought with a VA loan, your benefit restores and you can use it again.
Can my spouse use my VA loan benefit if I am not using it?
Only a surviving spouse of a service member who died in service or from a service-related injury can use a VA loan benefit. A spouse of a living veteran cannot use the veteran's benefit — the veteran must be the borrower. However, a spouse can co-borrow on the loan with the veteran.
What if the home appraises for less than the purchase price?
If the VA appraisal comes in lower than the sale price, you have a few options: renegotiate the price with the seller, make up the difference in cash, or walk away from the deal. The lender will not lend more than the appraised value, so you cannot borrow your way out of a low appraisal on a VA loan.