A VA loan is still the only mortgage in America that lets a qualified borrower buy a home with zero down and no monthly mortgage insurance. The program rules themselves haven’t shifted much going into 2026. What has shifted is how lenders interpret them, and that gap between what the VA allows and what an individual lender will actually fund is where most applications live or die.
So here’s the practical version: what the VA asks for, what lenders add on top, and the specific details that cause deals to stall at the closing table.
Who the VA will back
Eligibility comes from service history, not income or credit. The VA publishes a fairly rigid list, and there’s no discretion to work around it.
- Wartime service: 90 consecutive days of active duty, or 90 total days for a Guard or Reserve member called to active duty.
- Peacetime service: 181 consecutive days.
- National Guard and Reserve: six years of creditable service, even without a federal activation.
- Surviving spouses: eligible if the veteran died in service or from a service-connected disability, and they haven’t remarried before age 57.
- Discharge status: an honorable discharge is clean. A general discharge under honorable conditions often works. An other-than-honorable discharge generally closes the door.
You prove all of this with a Certificate of Eligibility. Get it at VA.gov, and most veterans see it issued on the spot after the VA pulls service records electronically. Anyone who has to mail discharge paperwork should start that process six weeks before house hunting, not six days.
Full entitlement versus remaining entitlement
This is the single most misunderstood part of the program. The VA no longer caps how much you can borrow with full entitlement, so a $900,000 purchase in a high-cost county can still be zero down. Lenders may set their own ceilings, but the VA doesn’t.
Remaining entitlement is different. If you already have a VA loan outstanding, or you had one foreclosed on, your guarantee is partly used up. In that case the down payment math returns. A borrower with $80,000 in remaining entitlement buying a $400,000 home would need roughly $20,000 down, since the guarantee only covers part of the loan. Restoring your entitlement is possible once the old loan is paid off and the property is sold, and the VA typically processes that within a few days through the same portal.
What lenders layer on top
The VA does not set a minimum credit score. It never has. But no lender is required to make a VA loan, and almost all of them add their own credit floor. In practice, 620 is the most common cutoff, with a handful of lenders going down to 580 and a few brokers placing borrowers in the 500s with heavy compensating factors like large cash reserves.
Debt-to-income is treated more flexibly than on conventional loans. The VA’s benchmark is 41%, but loans above that can still sail through if residual income is strong. Residual income means what’s left over each month after the mortgage, taxes, insurance, car payments, child support, and other obligations, compared against a regional table that factors in family size and loan amount. A family of four in the Midwest might be measured against roughly $1,000 in leftover income. The same family in coastal California, closer to $1,700. It’s a rule that rewards savers and quietly punishes borrowers carrying three car loans.
The overlap between the VA’s guidelines and a lender’s overlays is where applications are won and lost, and it’s worth understanding what the VA wants versus what lenders want before you start collecting quotes.
Funding fee, closing costs, and what a seller can cover
Most borrowers pay a one-time VA funding fee, financed into the loan. For a first-time use with nothing down in 2026, that’s 2.15% of the loan amount. A second use runs 3.3%. Put 10% down and the fee drops to 1.25%. On a $350,000 loan, the difference between first and subsequent use is about $4,000, so it’s worth knowing which bucket you’re in before you sign.
Some borrowers skip it entirely. Veterans receiving VA disability compensation, those with a proposed rating pending, Purple Heart recipients, and eligible surviving spouses are all exempt.
Closing costs otherwise look similar to any other loan: title, appraisal, recording, prepaid taxes and insurance. Where VA loans stand apart is seller concessions. Sellers can pay all of a buyer’s closing costs, and concessions tied to prepaids are capped at 4% of the loan amount. That combination is why VA buyers so often close with almost no cash out of pocket.
The house has to pass its own test
A VA appraisal is not a home inspection. It’s a valuation plus a minimum property requirements check. The appraiser confirms the home is safe, structurally sound, and sanitary. Some failures come up again and again:
- Peeling interior or exterior paint on homes built before 1978
- Roofs near the end of their useful life
- Missing handrails on steps with three or more risers
- Exposed wiring, double-tapped breakers, or outlets without covers
- Crawl space moisture, standing water, or blocked foundation vents
- No attic access, or a furnace that won’t fire
Condo projects need to be on the VA’s approved list, though that process has loosened considerably and many lenders now accept projects approved by Fannie Mae or Freddie Mac. If the appraisal comes in low rather than repair-heavy, the VA’s Tidewater process gives you a chance to supply comparable sales before the value is finalized. That window is short, usually two working days, so stay reachable.
Refinancing under 2026 rules
Two refinance paths exist, and they behave very differently. An Interest Rate Reduction Refinance Loan requires that you already have a VA loan, carries a 0.5% funding fee, and usually skips the appraisal. Lenders must also show a net tangible benefit, typically recouping costs within 36 months.
Cash-out is a different animal. You can pull up to 100% of the appraised value when paying off an existing VA loan, or 90% when replacing a non-VA mortgage, and the funding fee returns to the 2.15% or 3.3% schedule. Homeowners who built equity fast in the last few years often find this is the cheapest large-sum borrowing available to them, which is why tapping home equity through a VA cash-out refinance has become a common move. If your credit has taken a hit, compare it against a home equity loan’s debt-to-income and credit requirements before committing, because the two products price very differently for borrowers below 680.
Assumability is quietly the best feature
VA loans are assumable, and in a market where rates sit well above the 2% and 3% mortgages written a few years ago, that matters enormously. A buyer can take over the seller’s existing VA loan at the original rate, even if that buyer has never served. The catch: the buyer typically needs to cover the equity gap in cash, and the funding fee applies unless exempt. Sellers with an old low-rate VA loan are advertising it as a feature in listing descriptions now, which was almost unheard of five years ago.
If a veteran wants to keep that loan and buy again, the entitlement stays tied up unless the buyer is another veteran with their own entitlement to substitute.
How to shop it without wasting two months
Start with the Certificate of Eligibility, then get two or three quotes from lenders who do meaningful VA volume. Overlays vary enough that a borrower declined at one shop for a 43% DTI might be approved at another. Reviews help here, and a good starting point is this look at Veterans United as a VA lender, then compare the loan estimate line by line against a local credit union.
Ask each lender three questions: What’s your minimum credit score for VA? Do you run the loan through automated underwriting or manual? And who pays for the appraisal if the deal falls apart? The answers separate the shops that close VA loans weekly from the ones that do three a year.
And if the service history doesn’t qualify, all is not lost. Programs like the NACA program and its income limits offer another no-down-payment route, though the counseling requirement adds months to the timeline. The VA path is faster and cleaner when you fit it. Knowing exactly where you fit is the whole game.