VA

VA Loan Requirements: Eligibility, Entitlement and the Funding Fee

A VA loan allows 0% down for qualifying veterans, active-duty service members, and certain surviving spouses, plus no monthly private mortgage insurance regardless of the down payment. Eligibility rests on service history, documented through a Certificate of Eligibility, not on income alone.

Wise Capital Mortgage originates VA-guaranteed loans across Austin and the rest of Texas through its VA Loan Program, working directly with borrowers on entitlement, credit and the paperwork the Department of Veterans Affairs requires before closing. Matthew MontsDeOca, an independent mortgage broker with Wise Capital Mortgage, outlines the full eligibility list below: who qualifies, how a Certificate of Eligibility works, what the funding fee costs at each down payment tier, the credit and debt-to-income flexibility the VA allows, and the occupancy rule attached to every VA-backed loan. Read more about the broker's background on the about page.

Who is eligible for a VA loan?

Eligibility depends on service history. Veterans need 90 consecutive days of active duty during wartime or 181 days during peacetime, active-duty members need the same minimum while still serving, National Guard and Reserve members need six creditable years of service, and surviving spouses of a service member who died in the line of duty or from a service-connected disability qualify as well, according to the Department of Veterans Affairs (VA.gov, 2026).

A general or honorable discharge is standard, though some veterans discharged for a service-connected disability, hardship, or an early-out under a reduction in force still qualify for a Certificate of Eligibility. Guard and Reserve members who fall short of six years sometimes still qualify if they were called to active duty for a federal mission, or discharged early for a service-connected condition. Surviving spouses lose eligibility on remarriage before age 57, with narrow exceptions written into VA regulation.

None of these service categories guarantee loan approval on their own. A lender still reviews credit, income and debt-to-income ratio before issuing a loan commitment. Meeting the service requirement opens the door to the program. It does not replace the underwriting a lender performs on every file.

For a complete list of VA loan advantages beyond the eligibility rules above, the VA loan benefits guide covers the full picture, including assumability and the lack of a prepayment penalty.

What is a Certificate of Eligibility and how do you get one?

A Certificate of Eligibility, or COE, is the document a lender uses to confirm service history and remaining entitlement before underwriting a VA loan. Most borrowers obtain one within minutes through a lender's access to the VA's eligibility system, rather than applying directly.

Three paths exist for requesting a COE, per the Department of Veterans Affairs (VA.gov, 2026): through a VA-approved lender's automated system, through a VA.gov account for borrowers with complete service records on file, or by mailing VA Form 26-1880 with a copy of a discharge document or a statement of service. Veterans need a DD214. Active-duty service members need a statement of service signed by a commander, adjutant or personnel officer. Surviving spouses typically submit a DD214 along with proof of marriage and, where applicable, a VA determination of service-connected death.

The COE itself does not confirm loan approval. Lenders still pull credit, verify income, and confirm the home meets VA minimum property requirements before clearing a loan to close.

The certificate also lists an entitlement amount, the dollar figure behind the VA's guaranty on a given loan. A borrower using the benefit for the first time typically shows full entitlement on the certificate. A borrower with an existing VA loan, a prior foreclosure, or a short sale sees a reduced figure instead, which a lender uses to calculate how much of a second loan the VA backs.

Do VA loans require a down payment?

No down payment is required for a VA loan when a borrower has full entitlement and the purchase price does not exceed the amount a lender approves. Wise Capital Mortgage treats 0% down as the standard VA loan structure.

Dropping even a few percent down reduces the funding fee substantially, covered in the next section, and lowers the entitlement a borrower uses on the loan. Some borrowers choose a down payment anyway to shrink the loan balance or lower the fee tier, but the VA itself does not set a minimum.

No monthly private mortgage insurance applies to any VA loan, regardless of the down payment amount. This feature separates the VA loan program from FHA loans, which carry mortgage insurance for the life of most loans, and from conventional loans with less than 20% down.

Estimated payments vary by loan amount, term and the rate a borrower locks, so run the numbers for a specific purchase price on the mortgage calculator rather than relying on a general rule.

What is the VA funding fee?

The VA funding fee is a one-time charge paid at closing or financed into the loan balance, set as a percentage of the loan amount rather than a flat dollar figure. It funds the VA loan guaranty program itself, which is how the VA offers 0% down loans without charging monthly mortgage insurance, according to VA News (Department of Veterans Affairs, 2026).

For loans closing between April 7, 2023, and November 14, 2031, the published rate table looks like this, per VA Circular 26-23-06 (Department of Veterans Affairs, February 2023):

These figures are the most recently confirmed VA funding fee rates as of this writing in October 2026. Confirm the current table directly with a lender or on VA.gov before closing, since Congress sets the fee schedule by statute and has adjusted it before.

Veterans receiving VA compensation for a service-connected disability pay no funding fee at all, a provision covering veterans eligible for disability compensation who instead receive retirement or active-duty pay, surviving spouses receiving Dependency and Indemnity Compensation, and some Purple Heart recipients still on active duty, per VA News (Department of Veterans Affairs, 2026). A dedicated breakdown of fee tiers, refund rules and exemption documentation covers the topic in full detail separately.

Refinance transactions carry their own fee structure. A streamline refinance, known as an Interest Rate Reduction Refinance Loan, carries a lower flat fee than a purchase loan, while a cash-out refinance follows the same 2.15% and 3.3% tiers as a purchase, based on first use versus subsequent use. Most borrowers finance the fee into the loan balance rather than paying it out of pocket, which raises the total debt slightly but avoids an added cost due at the closing table.

How flexible are VA credit and debt-to-income requirements?

The VA sets no minimum credit score, leaving the underwriting credit floor to each lender. Most lenders originating VA loans look for a credit score in the 580 to 620 range at minimum, with stronger pricing available well above those figures.

Debt-to-income guidelines run looser than conventional underwriting too. The VA's own guidance favors a residual income test, measuring money left over after the mortgage payment and other obligations, over a strict debt-to-income ceiling. A borrower with a DTI above 41% still qualifies if residual income and compensating factors support it.

Credit requirements differ by loan program, and a borrower weighing VA against FHA or conventional financing benefits from comparing score minimums side by side. The credit score guide breaks down minimums for every loan type in current use.

What is the VA occupancy requirement?

A VA loan is intended for owner-occupied purchases, not rental or investment property. Occupancy as a primary residence is generally required within 60 days of closing.

Exceptions exist for deployed service members, whose spouse satisfies the occupancy requirement on their behalf, and for borrowers refinancing a home previously occupied under a VA loan. A multi-unit property up to four units qualifies as long as the borrower occupies one unit, with the remaining units eligible for rental income.

Is there a maximum VA loan amount?

Full entitlement carries no VA-set loan limit, a change the Blue Water Navy Vietnam Veterans Act made effective January 1, 2020, according to the Department of Veterans Affairs (VA.gov, 2026). Before 2020, the VA capped its zero-down guaranty at the county conforming loan limit, and a purchase above it needed a 25% down payment on the overage.

Full entitlement applies to a borrower who has never used VA loan benefits, or who used them before and sold the property while repaying the loan in full. Partial entitlement, left over from a prior VA loan still outstanding or from a foreclosure, still carries a county-level limit, and a second-tier entitlement calculation determines how much a borrower draws on a new loan. Loan size still depends on a lender's own approval, based on income, credit and debt-to-income ratio, regardless of the VA's guaranty.

A borrower carrying a VA loan on a current home while buying a second property with VA financing relies on this second-tier entitlement math, a separate calculation from the zero-limit rule above. The same framework applies to higher-balance purchases sometimes labeled VA jumbo loans, which use the standard VA guaranty structure rather than a distinct loan program.

How does the VA loan process work from application to closing?

The process starts with a lender pulling credit and confirming a Certificate of Eligibility, then moves to a pre-approval letter a borrower uses while house hunting. The pre-approval versus pre-qualification guide explains the difference and why a seller's agent treats the two documents differently in a competitive offer.

After an accepted offer, the lender orders a VA appraisal, which checks both value and minimum property requirements, a step distinct from a conventional appraisal. Underwriting reviews income, assets and the funding fee calculation, then issues a clear-to-close once conditions are satisfied.

Closing costs follow their own set of VA rules, including limits on which fees a seller or lender absorbs instead of the borrower, a topic broad enough for its own guide. Between the funding fee, the appraisal, title work and the rest of the closing cost list, a borrower benefits from a lender who walks through each line item before signing.

Frequently asked questions

Who is eligible for a VA loan? Veterans, active-duty service members, National Guard and Reserve members with qualifying service, and certain surviving spouses are eligible, based on service length and discharge status documented through a Certificate of Eligibility.

Do VA loans require a down payment? No. A VA loan allows 0% down for borrowers with full entitlement, and no monthly private mortgage insurance applies regardless of the down payment amount.

What is the VA funding fee? It is a one-time percentage-based charge paid at closing or financed into the loan, ranging from 1.25% to 3.3% of the loan amount depending on down payment and prior use, with veterans receiving VA disability compensation exempt from the fee entirely.

Does a VA loan have a maximum loan amount? Borrowers with full entitlement face no VA-set loan limit, a change in place since January 1, 2020. Borrowers with partial entitlement remain subject to county-level limits.

What credit score does a VA loan require? The VA sets no minimum credit score. Individual lenders set their own floor, commonly in the 580 to 620 range, with stronger pricing available above those thresholds.

Do VA loans require mortgage insurance? No. VA loans carry no monthly private mortgage insurance at any down payment level, a distinction from FHA and most conventional loans under 20% down.

How long do you need to occupy a home purchased with a VA loan? Occupancy as a primary residence is required, generally within 60 days of closing, with exceptions for deployed service members and certain refinance transactions.

Related Reading

Educational content, not a commitment to lend or an offer of credit. Program parameters vary by lender and change over time. Figures are illustrative and current as of the article’s publish date; confirm current terms before relying on them.