What Are VA-Guaranteed Loans?

VA-guaranteed loans are among the many privileges that make transitioning to civilian life easier for veterans. A VA loan is a valuable asset when considering buying a home. There are many reasons to use a VA-guaranteed loan.

Financing

Eligible veterans or spouses can apply for Veterans Affairs (VA)-guaranteed loans through banks, mortgage companies or private lenders. VA loans can be used to refinance a home, an original VA loan or to have a home built. No down payment is necessary unless the home is priced more than it's worth.

Entitlement

For loans less than $144,000, the entitlement is $36,000. Veterans receive an additional amount up to 25 percent for homes that are more than $144,000.

VA Funding Fee

The veteran can finance the VA funding fee or receive a reduced fee with a down payment of 5 percent. VA will provide assistance in time of financial hardship.

Guaranty

VA guarantees a loan amount up to $417,000. VA loans protect the lender from loss of the guaranteed amount.

Home Improvements

Veterans may use VA loans to repair or to improve a home.

Warranty

VA requires builders to give buyers a 1-year warranty even on manufactured homes.