What is a VA loan and do I qualify?

VA loans are one of the most powerful home financing tools available. They are not issued by the VA directly but by private lenders and are guaranteed by the VA, which protects lenders if the borrower defaults. Key benefits include no down payment required, no monthly PMI or mortgage insurance, competitive interest rates that are often lower than conventional loans, limited closing costs that sellers can pay, and no prepayment penalties. Credit requirements are more flexible than conventional loans. Most lenders look for a minimum credit score of 620, but there is no official VA minimum. The VA requires borrowers to have sufficient residual income after paying housing expenses and other debts. You also need a valid Certificate of Eligibility, which you can obtain through the VA's eBenefits portal, through your lender, or by mail. VA loans can be used for primary residences, including single-family homes, condos, and multi-unit properties up to four units (you must occupy one unit). There is no maximum loan amount, but there is a limit on the VA's guarantee, which affects how much you can borrow without a down payment.