A VA-backed loan may allow eligible veterans and service members to buy with no down payment and without monthly mortgage insurance — here's how it works in plain language.

Today is Veterans Day, and first, thank you to everyone who has served and to the families who served alongside them. Arizona is home to many military families, including those connected to Luke Air Force Base, and many of the buyers I meet ask whether a VA loan could work for them.

Here's an overview of the basics. Your lender will confirm what applies to your situation.

What Is a VA Loan?

A VA-backed purchase loan is a mortgage made by a private lender, such as a bank, mortgage company, or credit union, and backed in part by the U.S. Department of Veterans Affairs. It's available to eligible veterans, service members, and some surviving spouses.

What Are the Main Features?

According to the VA, a VA-backed purchase loan may require no down payment as long as the sales price isn't higher than the home's appraised value. Loans above the conforming limit may require a down payment on the amount above it. Borrowers also don't pay private mortgage insurance (PMI) or FHA-style mortgage insurance premiums.

What Is the Funding Fee?

A one-time VA funding fee may apply. You can roll it into the loan or pay it at closing, and on purchase loans it's the only cost you can finance. Some borrowers don't pay it, including those who receive VA compensation for a service-connected disability and surviving spouses who receive Dependency and Indemnity Compensation. Ask your lender whether you're exempt.

What Do You Need to Qualify?

You'll need a Certificate of Eligibility (COE), which you can request through the VA, and you'll still need to meet the VA's and your lender's standards for credit and income. You must also plan to live in the home you're buying with the loan. Eligible properties can include single-family homes, condos in VA-approved projects, new construction, and some manufactured homes.

What About Closing Costs?

You and the seller can negotiate who pays common closing costs. Sellers can credit you toward closing costs without a limit on those credits, but certain seller concessions, such as funding fee credits, debt payoff, and prepaid insurance, are capped at 4% of the home's reasonable value. Your lender can explain exactly what counts.

How Does a VA Loan Affect Your Offer?

VA loans have their own appraisal and property requirements, so your lender and I will want to review them early. Many sellers are comfortable accepting VA offers, and a well-prepared offer with a pre-approval letter is a strong start.

Frequently Asked Questions

Do VA loans require a down payment? According to the VA, a VA-backed purchase loan may require no down payment, provided the sales price isn't higher than the appraised value; loans above the conforming limit require a down payment on the excess.

Do VA loans require mortgage insurance? No. The VA states borrowers don't pay PMI or FHA-style mortgage insurance premiums, though a one-time funding fee may apply.

What is a Certificate of Eligibility? It's documentation that you qualify for VA home loan benefits, which you can apply for through the VA.

Can sellers help with a VA buyer's closing costs? Yes. Sellers can credit closing costs, though certain seller concessions are capped at 4% of the home's reasonable value.

☕ Let's Have a Little Cafecito with Gracie!

Let's sit down, enjoy a little Cafecito, and have a corazón a corazón conversation about your loan eligibility.

No pressure, no obligation—just good conversation, honest advice, and a plan that's right for YOU!

Gracie Vega
The Vega Real Estate Group | Realty ONE Group
📞 602-348-8773
We Make Your Home Famous! 🏡❤️

This content is provided for informational purposes only and does not constitute legal or financial advice. All real estate services are provided in compliance with Fair Housing laws, RESPA, TCPA, the REALTOR® Code of Ethics, and Arizona Department of Real Estate advertising regulations. Equal Housing Opportunity. Gracie Vega, Realty One Group, AZ License #SA514613000.

Gracie Vega
Realty One Group
License #SA514613000
602.348.8773
gracie@vegarealestate.com

Gracie Vega is an experienced Arizona real estate professional with The Vega Real Estate Group at Realty ONE Group, serving Phoenix and the West Valley, including Glendale, Peoria, Surprise, Buckeye, Goodyear, Avondale, and Tolleson.

Whether you're buying your first home, selling a property, exploring new construction, or relocating to Arizona, Gracie provides local real estate guidance in English and Spanish.

The Vega Real Estate Group — We Make Your Home Famous!
Visit: https://thevegarealestategroup.com
Have a real estate question? Contact Gracie to schedule a personal consultation.