Best VA Lenders: 0% Down Payments for Veterans

VA loans are designed to make home-buying easier for veterans and their families. No down payment is required, allowing you to hold on to more cash and qualify for low, fixed interest rates with good credit.

If you’re ready to buy a home, comparing lenders that offer VA loans is a good place to start. The most important features include loan repayment terms, interest rates, and fees. We’ll share recommendations for the best VA lenders and other important considerations when getting a VA loan. 

Best VA lenders 

VA loans have some characteristics that set them apart from other mortgage loans, so choosing a lender who knows the ins and outs is smart. Below, you’ll find six top lenders that rate as the best for VA borrowers, with a glance at their rates and fees. 

Tip

The VA funding fee is a one-time payment you’re required to make that helps cover the costs of the VA loan program. 

SoFi

Rocket Mortgage

Quicken Loans

Navy Federal

What are VA loans?

VA loans are mortgage loans guaranteed by the U.S. Department of Veterans Affairs. These loans aim to help veterans, active-duty service members, and eligible surviving spouses achieve homeownership. 

The standout feature of VA loans is the ability to purchase a home with no down payment. This makes home buying accessible for those who might not have substantial savings.

VA loans also tend to offer lower interest rates than conventional loans, reducing the overall cost of borrowing. Another significant benefit is the lack of private mortgage insurance (PMI), which is mandatory for conventional loans with less than a 20% down payment. This absence further reduces the monthly payment burden.

In addition to these benefits, VA loans come with flexible credit requirements and less stringent debt-to-income ratios. A funding fee likely applies, but the long-term savings from lower rates and no PMI often outweigh the initial cost. This makes VA loans an attractive option for eligible borrowers looking to purchase a home.

Do the best lenders for VA loans still charge a funding fee?

The VA funding fee ranges from 0.5% to 3.3% and the amount you pay is based on the type of loan you get, the amount, your down payment, and whether you’ve had a VA loan before. This fee is standard for VA loans unless you qualify for an exemption.

You won’t pay this fee if one of these items applies to you—if you:

• Receive VA compensation for a service-connected disability
• Are eligible for VA compensation for a service-connected disability but are receiving retirement or active-duty pay instead
• Receive dependency and indemnity compensation as the surviving spouse of a veteran
• Are a service member who’s received a proposed or memorandum rating before your loan closing date that says you’re eligible for compensation due to a pre-discharge claim
• Are an active duty service member who receives the Purple Heart on or before the loan closing date

If you’re required to pay the fee you can do so at closing or roll the cost into your loan. If you pay the fee and are later awarded VA compensation for a service-connected disability you may be able to get it refunded back to you. 

Pros and cons of VA loans 

Getting a VA loan vs. a conventional loan or another government-backed loan can offer advantages and disadvantages. Weighing both sides can help you decide if going the VA loan route makes sense. 

Pros

• No down payment

  VA loans don’t require a down payment in most cases, which allows you to hold on to more of your cash at closing. That’s an advantage if you want to make home repairs or improvements after moving in but want to use something other than a credit card or personal loan.

• No PMI

  VA loans don’t have private mortgage insurance (PMI), which is required for conventional loans when you put less than 20% down. Not having to pay PMI can keep your mortgage payments lower.

• No prepayment penalty

  If you pay a loan off early, lenders can charge prepayment penalties to recoup lost interest. With VA loans, lenders can’t assess this fee so you’re not punished for paying off your loan ahead of schedule.

• Low rates

  Compared to conventional mortgage loans, VA loans can offer lower interest rates. Paying a lower rate can mean a smaller monthly payment and less interest paid over the life of the loan. 

Cons

• Funding fee

  The VA funding fee is required unless you qualify for an exemption. You can finance the fee into the loan so you don’t pay out of pocket but that adds to your total borrowing costs.

• Appraisal

  Conventional mortgage loans can require an appraisal but VA loan appraisals tend to be more stringent. The home must meet certain minimum requirements, otherwise, the VA won’t approve the loan.

• Property restrictions

  You can use a VA loan to buy a primary home, but not a second home or investment property. The home itself must undergo inspection to ensure that it’s structurally sound.

• No equity

  Buying a home with nothing down means you start at $0 equity. Equity is the difference between what you owe on the home and what it’s worth. If you’re hoping to borrow against your equity eventually, you may be in for a longer wait.

In my experience, the pros of choosing the VA loan over other conventional loans have outweighed the cons in most instances. This is a great benefit to military members and their qualifying family members. 

Erin Kinkade

CFP®

How to choose the best VA loan lenders 

Finding the best VA lender to work with takes some research, but finding the right loan option is worth it. Here are some tips to remember as you compare the best VA lenders. 

• Compare rates across loan terms, including 15- and 30-year options. 
• Look for lenders that don’t charge a loan origination fee, which you’d pay on top of the VA funding fee. 
• Consider whether it’s worth paying mortgage points—a flat fee you pay to your lender to bring your VA loan rate down—if the lender offers that option. 
• Use a VA loan calculator to estimate what you’d pay monthly with a down payment vs. no down payment. 
• You can review the lender’s rating on Trustpilot and the Better Business Bureau (BBB) to see what past and current customers like or dislike. 

Getting rate quotes from multiple VA loan lenders can help you narrow the options. It takes just a few minutes to compare VA loan rates online to see what different lenders have to offer.

Read More

The Best Mortgage Lenders

How to apply with VA-approved lenders 

If you’ve found a VA lender you’d like to work with, applying for a loan is the next step. Here’s a brief overview of how the process works. 

1. Request a COE. You’ll need a Certificate of Eligibility (COE) to confirm with your lender that you’re eligible for a VA loan. You can apply for a COE online through the Department of Veterans Affairs website.
2. Get pre-approved. Getting pre-approved is a chance to see what kind of terms and rates you might qualify for. It’s not a guarantee of approval but it can help with shaping your home buying budget. 
3. Apply. Once you make an offer on a home, you can complete the lender’s VA loan application, which you should be able to do online. You’ll need to fill in your personal information and provide supporting documentation the lender requires, including pay stubs, tax forms, and bank statements. 
4. Complete the appraisal. Your lender will schedule an appraisal, which you’ll pay for out of pocket. VA loans don’t require home inspections, however, it may be worth paying an additional fee for one so you’re aware of any issues with the property before closing. 
5. Sign the paperwork. Assuming you’re approved you’ll move ahead to closing, where you’ll sign the loan documents and pay closing costs. You’ll pay your funding fee at this time unless you’re rolling it into the loan. 

Overall, the process isn’t different from getting a conventional home loan. Organizing your documents beforehand and choosing a property that fits VA loan requirements are two of the easiest ways to avoid any hiccups during the process. 

Ask the expert

Erin Kinkade

CFP®

If you are concerned about not having equity in the home, they can make a down payment if they have the means to do so. However, if the borrower is purchasing an older home or a home in a high-demand housing market, it could make sense to go with a conventional mortgage due to the less stringent requirements found in an inspection; in these types of cases, choosing a VA loan could lead to your offer being rejected by the seller who receives more attractive offers, such as those with quicker closing or less maintenance for the seller.

FAQ

What are typical VA lenders’ eligibility requirements?

VA lenders require borrowers to meet specific eligibility criteria. These include being an active-duty service member, veteran, or eligible surviving spouse. 

Required service may range from 90 days during wartime to 181 days of continuous service during peacetime. National Guard members and reservists may have different requirements. 

Most lenders consider credit scores, though the VA does not set a minimum score. Other factors include sufficient income, a steady job history, and a valid COE.

How do VA loans compare to conventional loans?

VA loans offer several advantages over conventional loans. One of the most notable is the 0% down payment requirement, which can make home buying more accessible. VA loans often feature lower interest rates and don’t require private mortgage insurance (PMI), saving you long-term costs compared to conventional loans. 

However, they often come with a funding fee, which you can roll into the loan amount. The underwriting process for VA loans can be more lenient regarding credit scores and debt-to-income ratios, making them beneficial for qualified veterans.

Can I qualify with the top VA loan lenders if I have bad credit?

Yes, you can qualify for a VA loan even with bad credit. Different lenders have various credit requirements, but many VA lenders are flexible. The VA does not set a minimum credit score, leaving it up to individual lenders. 

Typically, a score of at least 620 is desirable, but some lenders might approve loans for borrowers with lower scores. Other factors, such as a stable income and a history of on-time bill payments, can influence your qualification prospects.

Will I pay fees for a VA loan?

Yes, VA loans come with certain fees. The primary fee is the VA funding fee, which can range from 1.4% to 3.6% of the loan amount, depending on factors such as your down payment and whether it’s your first VA loan. 

This fee helps sustain the VA loan program. You might also pay appraisal fees, closing costs, and other expenses similar to conventional loans. However, VA loans do not require PMI, offering significant savings over time.

How we picked the best VA home loan lenders

Since 2019, LendEDU has evaluated mortgage companies to help readers find the best mortgages. Our latest analysis reviewed 228 data points from 12 lenders and financial institutions, with 19 data points collected from each. This information is gathered from company websites, online applications, public disclosures, customer reviews, and direct communication with company representatives.

These star ratings help us determine which companies are best for different situations. We don’t believe two companies can be the best for the same purpose, so we only show each best-for designation once.

Recap of the best VA home loan lenders