If you meet the requirements for a home loan backed by the Department of Veterans Affairs, you could get a mortgage without making a down payment: one of the program’s main benefits. The VA guarantees a portion of your loan, which means your mortgage could have better terms than most others.
Here’s more about VA home loans and how to find the best VA mortgage lender for your needs.
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U.S. News selects the Best Loan Companies by evaluating affordability, borrower eligibility criteria and customer service. Those with the highest overall scores are considered the best lenders.
To calculate each score, we use data about the lender and its loan offerings, giving greater weight to factors that matter most to borrowers. For mortgage lenders, we take into account each company’s customer service ratings, interest rates, loan product availability, minimum down payment, minimum FICO score and online features.
The weight each scoring factor receives is based on a nationwide survey on what borrowers look for in a lender.
To receive a rating, lenders must offer qualifying loans nationwide and have a good reputation within the industry. Read more about our methodology.
Axos Bank, founded in 2000, is a digital financial services company based in San Diego. The full-service online bank offers everything from personal and business savings and checking accounts to auto and home loans.
Borrowers with an Axos Bank checking account can reduce or eliminate the lender fee and earn cash back by using the account to make monthly mortgage payments.
PrimeLending is a Dallas-based mortgage lender in operation since 1986. The company offers several mortgage loan options, including conventional loans, jumbo loans, government-backed loans and refinance loans. The lender is a subsidiary of PlainsCapital Bank.
AmeriSave Mortgage Corp. is an online lender that has been in business since 2002. It was one of the first to offer an offsite, digital mortgage experience for customers. The company says it has financed more than 390,000 homes since it began operating. With headquarters in Atlanta, AmeriSave services loans in 49 states and Washington, D.C.
Headquartered in Charlotte, North Carolina, Truist Bank was formed in 2019 after SunTrust and BB&T banks merged. Truist Bank offers a variety of mortgage products, including refinancing and home equity lines of credit.
Caliber Home Loans of Coppell, Texas, offers mortgage products nationwide. Options include conventional, adjustable-rate, jumbo, refinancing, Federal Housing Administration, U.S. Department of Agriculture and Department of Veterans Affairs loans.
Caliber has been in business since 2008, and is solely focused on home lending products.
Carrington Mortgage Services, founded in 2007, offers an array of mortgage and refinancing options to borrowers seeking conventional or government-backed loans. Its California-based parent company, Carrington Holding Co., was established in 2003 and provides a range of real estate services. Carrington Mortgage Services is based in California and also has offices in Arizona, Connecticut, Florida, Indiana and Maryland.
New American Funding is a mortgage lender offering a variety of home loan options to homebuyers and homeowners nationwide except for Hawaii. The company, founded in 2003 and based in Tustin, California, has originated $56 billion in mortgages to date.
PNC Bank is one of the largest banks in the United States, serving more than 9 million customers in all 50 states. A full-service mortgage lender, PNC offers most mortgage loan product types.
Veterans United Home Loans offers mortgages in all 50 states and Washington, D.C., and specializes in Department of Veterans Affairs loans. Since 2016, Veterans United Home Loans has generated the largest number of VA purchase loans per year in the nation. The lender was founded in 2002 and is based in Columbia, Missouri.
Wells Fargo offers a variety of mortgage and home equity products in 36 states. The lender offers conventional, adjustable-rate, Federal Housing Administration, U.S. Department of Veterans Affairs, U.S. Department of Agriculture, jumbo and refinancing loans, as well as home equity lines of credit.
What Are Today’s VA Loan Rates?
Locking in a low mortgage rate today can save you thousands over the life of your loan. Compare your mortgage rate offers with national average trends.
The VA doesn’t lend money with VA loans, but it does offer a guarantee. You borrow from a private VA mortgage lender, and the government guarantees payment for a portion of your mortgage. If your loan is more than $144,000 and you default, the VA will pay the lender up to a quarter of the loan amount.
This guarantee reduces risk for lenders and allows borrowers to obtain competitive interest rates and terms, including buying with no down payment and private mortgage insurance.
You do not have to be a first-time homebuyer to use a VA loan. As long as you qualify for VA loan benefits, you can use them as many times as you would like. However, the VA loan must be used to purchase a primary residence and not a vacation home or investment property.
1. Purchase loan: Put no money down and borrow up to the conforming loan limit in most areas – more in some high-cost locations – to build, buy or improve a home. You won’t need private mortgage insurance, which is usually required on a conventional loan when you don’t make at least a 20% down payment.
2. Interest rate reduction refinance loan: An IRRRL, often called a streamline refinance, replaces your VA-backed loan with a new one and different terms that reduce or stabilize your mortgage payments. Pay attention to your closing costs, dividing estimated costs by expected monthly savings, to determine whether to proceed.
3. Cash-out refinance loan: This loan may help you take cash out of your home equity to pay off debt, remodel or help with college expenses. Borrowers can also choose this option to refinance a non-VA loan into a VA-backed loan. You can borrow up to the conforming loan limit with no down payment in most areas, but keep refinancing costs in mind.
4. Native American Direct Loan: If you’re a veteran and either you or your spouse is Native American, this program may help you buy, build or improve a home on federal trust land. An NADL may also be refinanced to reduce your interest rate. Borrowers need to meet the VA’s eligibility criteria for an NADL, including credit and income standards.
You will need to meet service or discharge criteria to qualify for a VA loan. You may also be eligible as a spouse of a veteran or in other situations.
When you apply for a VA loan, you will need to present a Certificate of Eligibility, or COE, from the VA to the lender to show you qualify for the program.
You can apply for a COE online, by mail or through your lender using the VA’s web-based system. Applying by mail may take longer than the other two options.
In addition to military service requirements, you must meet the VA mortgage lender’s income, credit score and other conditions to qualify for the loan.
The VA sets no minimum credit score, but lenders typically expect a score of at least 620.
The lender will also consider your debt-to-income ratio, which is the percentage of your gross monthly income spent on debt payments. Most lenders prefer a DTI of 43% or lower.
| VA Funding Fees | ||
|---|---|---|
| VRates for veterans, active-duty service members, and National Guard and Reserve members | ||
| First Use | Down Payment | Funding Fee |
| Less than 5% | 2.3% | |
| More than 5% | 1.65% | |
| More than 10% | 1.4% | |
| After First Use | Less than 5% | 3.6% |
| More than 5% | 1.65% | |
| More than 10% | 1.4% | |
| Source: VA | ||
| VA Funding Fees for Cash-Out Refinancing Loans | ||
|---|---|---|
| Rates for veterans, active-duty service members, and National Guard and Reserve members | ||
| First Use | After First Use | |
| 2.3% | 3.6% | |
| Source:VA | ||
Consider these five key factors to help you select the best VA mortgage lender for your needs:
1. Annual percentage rates, or APRs. The APR reflects the interest rate, plus fees and closing costs, and it tells you the true cost of borrowing. Shop around, and compare quotes from different VA lenders. You can compare APRs on loan estimates, which break down on Page 3 how much of a loan you will pay off after five years.
2. Closing costs. Lenders can charge a number of closing costs to set up VA loans, including funding, origination and administrative fees. When you add up these costs, the loan with the lowest interest rate might not be the best VA home loan overall. This shows why you want to compare APRs and not just interest rates.
3. Products. Loan options depend on the VA mortgage lender. However, VA loans often have the same terms as conventional mortgages: They can come with fixed or adjustable rates and last up to 30 years.
4. Eligibility requirements. VA loan criteria are consistent when it comes to military service, but VA lenders could have different credit and income requirements. Most lenders have a minimum credit score and a maximum debt-to-income ratio to qualify.
Applying for a VA loan is nearly identical to applying for a conventional mortgage, except for VA forms.
You will need to apply for and receive your COE, which you provide to the lender as proof that you meet the service requirements for a VA loan. If you’re a veteran, you must also submit your DD Form 214, Certificate of Release or Discharge from Active Duty.
Another difference is that a VA-certified appraiser inspects the home to make sure it meets the VA’s minimum property requirements and is acceptable for a loan.
Here’s more information about the mortgage timeline to have a better idea of what to expect.
Make sure you understand the pros and cons of a VA loan to help you decide whether to use one.
- You don’t need a down payment. Borrow up to the conforming loan limit – and more in some cases – with no down payment as long as the sale price of the home isn’t higher than its appraised value. This feature can be especially helpful for first-time homebuyers who haven’t saved much money.
- You don’t have to buy private mortgage insurance. PMI is typically required if your down payment is less than 20% of the home’s purchase price. This is a significant savings, as PMI can cost between 0.5% and 1% of the loan amount each year.
- You could qualify with fair credit. You may be able to qualify for a VA loan with a lower credit score than you would with a conventional mortgage because of the guarantee. VA mortgage lenders typically require minimum FICO scores from 580 to 620.
- Sellers can help with closing costs. Closing costs are typically between 2% and 5% of the purchase price. With VA loans, the seller can agree to pay for some of your closing costs: up to 4% of the purchase price.
| VA Cash-Out Fees | ||
|---|---|---|
| Type of veteran | Fee for first-time use | Fee for subsequent use |
| Active duty | 2.15 percent | 3.3 percent |
| Reserves or National Guard | 2.4 percent | 3.3 percent |
- You’ll pay a VA funding fee. The funding fee ranges from 2.3% to 3.6% if you’re not making a down payment and depending on the type of loan and whether you’re using a VA-backed loan for the first time. The VA funding fee drops to as low as 1.4% if you’re able to make a down payment of 10% or more.https://www.va.gov/housing-assistance/home-loans/funding-fee-and-closing-costs/
- You can only use it to buy a primary residence. This program is not for buying a vacation home or investment property.
- You can’t buy a fixer-upper in major disrepair. You can only use a VA loan to buy a home that meets the VA’s minimum property requirements. Any unlivable property will be rejected during inspection, and sellers will be asked to make necessary repairs before the purchase is complete.
Chase, one of the world’s largest banks, was founded in 1799 in New York and offers mortgage and refinance loans.
Founded in 1990, Freedom Mortgage is one of the country’s largest loan originators and services, operating in all 50 states plus the District of Columbia, the U.S. Virgin Islands and Puerto Rico. Based in Mount Laurel, New Jersey, Freedom Mortgage was named No. 1 Veterans Affairs lender and No. 1 Federal Housing Administration lender by the industry publication Inside Mortgage Finance.
Freedom Mortgage offers a range of mortgage loans, including conventional, adjustable-rate, refinance, FHA, VA and U.S. Department of Agriculture. But what Freedom Mortgage is known for is its mission to help American military personnel purchase a home.
Homefinity launched in 2018 as the online lending division of Fairway Independent Mortgage. It offers a variety of mortgage products including conventional mortgages, Federal Housing Administration and Veterans Affairs mortgages, mortgages for physicians, and mortgage refinancing.
Founded in 2008, Pennymac is a mortgage lender based in California with more than $510 billion in loans serviced, according to the lender. Pennymac offers a range of home loans, including conventional, Federal Housing Administration, Veterans Affairs and investment property mortgages.
CMG Financial is a privately held mortgage banking firm operating nationwide with localized support, founded in 1993 and based in San Ramon, California. The lender offers a range of products including conventional, government and specialty mortgages, like jumbo loans.
LoanDepot is a mortgage lender that operates nationally with more than 200 branches and delivers both a digital experience and face-to-face service. The lender offers fixed- and adjustable-rate conventional mortgages, Federal Housing Administration and Department of Veterans Affairs loans, as well as refinance and renovation loans. The company was founded in 2010 and is based in Foothill Ranch, California.
Pentagon Federal Credit Union, widely known as PenFed, offers borrowers access to many types of mortgages: conventional, adjustable rate, jumbo and Department of Veterans Affairs, plus refinancing loans and home equity lines of credit. The financial institution, which serves 2.5 million members, was established in 1935 and is based in McLean, Virginia.
Bank of America serves roughly 66 million customers in all 50 states. The lender offers conventional, Federal Housing Administration, Department of Veterans Affairs and jumbo loans as well as home equity lines of credit and mortgage refinancing.
Flagstar offers banking and loan products to borrowers in all 50 states. Borrowers can obtain mortgage and home equity products including conventional loans, Federal Housing Administration loans, Veterans Affairs loans, U.S. Department of Agriculture loans, adjustable-rate mortgages, and home equity loans and lines of credit.
Rocket Mortgage, the largest mortgage lender in the nation, was founded in 1985. The Detroit-based company is best known for its fully digital experience of buying or refinancing a home. Rocket Mortgage changed its name from Quicken Loans in the summer of 2021.
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