The Best Deal in Mortgages, If You Earned It
If you served and you qualify, the VA loan is the strongest mortgage product in America. That is not hype. It is arithmetic.
Zero down payment. No monthly mortgage insurance. Ever. The Department of Veterans Affairs guarantees a slice of the loan, which lets lenders offer terms no civilian program touches. A conventional borrower putting 3% down pays PMI every month until they build 20% equity. An FHA borrower pays mortgage insurance for potentially the life of the loan. A VA borrower with zero down pays neither.
The VA also caps certain lender fees and bans prepayment penalties. You will not get punished for paying the loan off early.
So what is the catch? One fee. Worth understanding properly.
The Funding Fee: VA’s One Big Cost
Instead of monthly insurance, the VA charges a one-time funding fee that keeps the program running. Per VA.gov, the 2026 purchase-loan tiers are:
First use of your VA benefit:
- Less than 5% down: 2.15% of the loan amount
- 5% to 9.99% down: 1.5%
- 10% or more down: 1.25%
Subsequent use:
- Less than 5% down: 3.3%
- 5% to 9.99% down: 1.5%
- 10% or more down: 1.25%
On a $350,000 first-use loan with nothing down, the fee is $7,525. Most borrowers roll it into the loan rather than paying cash at closing. Financing it costs you interest on that amount for the life of the loan, but it keeps your cash position intact. For most buyers that is the right call.
Notice the subsequent-use jump to 3.3%. Second-time VA borrowers with some savings should run the numbers on a 5% down payment, because it cuts the fee more than in half, from 3.3% to 1.5%. On a $350,000 loan that is the difference between $11,550 and $5,250 in fees. Real money.
Who Pays No Fee at All
This part gets missed constantly, and missing it costs thousands. Per VA rules, you are exempt from the funding fee if you:
- Receive VA disability compensation for a service-connected condition,
- Are an eligible surviving spouse, or
- Are an active-duty Purple Heart recipient.
If you are exempt, the VA loan has no funding fee, no down payment requirement, and no monthly mortgage insurance. There is no better mortgage on the market. If a lender charged you a funding fee and your disability rating came through afterward with an effective date before closing, you may be owed a refund. Ask for it.
How to Get One
Step one: get your Certificate of Eligibility. Request it at VA.gov or let your lender pull it electronically. Usually takes minutes. The COE proves your service meets VA requirements.
Step two: get underwritten like any other borrower. The VA does not set a minimum credit score. Lenders apply their own standards and review your income and debts. Translation: a denial from one lender is not a denial from the VA. Different lenders set different floors, so a second opinion is free and often different.
Step three: shop it. VA loans are not all priced the same. Lenders that do real VA volume tend to quote better rates and know the appraisal process, which has its own property rules. Get three quotes minimum and compare them line by line. Our best mortgage lenders comparison covers what to look for.
VA vs. FHA vs. Conventional
If you are VA-eligible, the comparison is usually short. FHA charges 1.75% upfront plus monthly premiums that can last the life of the loan. Low-down conventional loans charge PMI until you hit 20% equity. The VA funding fee is one charge, once, and exempt borrowers skip even that.
The edge case: a VA borrower with excellent credit and 20%-plus down might find a conventional loan competitive, since 20% down kills PMI anyway and skips the funding fee. Run both. Use our mortgage calculator to compare total monthly costs, and weigh the down payment trade-off in our down payment guide.
For everyone else with eligibility: this benefit is the one you earned. Use it. Start at the mortgages hub to see the full field, then get quotes.