The VA Home Loan Program: Putting Homeownership Within Reach for Military Borrowers

The VA Home Loan Program: Putting Homeownership Within Reach for Military Borrowers

Since World War II, the VA home loan has helped millions of service members, veterans, and military families achieve the dream of homeownership. Despite its advantages, many veterans aren’t utilizing this benefit, either because they’re unaware that it exists or because they believe some of the common misconceptions.

If you’re eligible for the VA loan, it’s definitely worth exploring because the program offers a handful of benefits not typically found in other mortgage products.

No down payment

One of the most valuable aspects of the VA home loan is that qualified buyers can purchase a home with no money down. Conventional and FHA loans typically require a down payment of at least 3% and 3.5%, respectively. On a $200,000 mortgage, that’s $6,000 for a conventional loan and $7,000 for FHA—significant sums of cash for any buyer. Skipping the down payment is a huge advantage for military borrowers, enabling them to get into a home sooner and without draining their savings.

No monthly mortgage insurance

Conventional loans and other government loan options typically require monthly mortgage insurance when a down payment is less than 20%. The mortgage insurance rate depends on several factors, but Freddie Mac says borrowers on conventional loans can expect to pay approximately between $30 and $70 per month for every $100,000 borrowed. (more…)