Buying a home with a VA-backed loan | Veterans Affairs (2024)

Get step-by-step instructions for buying a home through the VA home loan program.

What kind of VA-backed loan will I need to buy a home?

You’ll need a VA-backed purchase loan

You’ll go through a private lender, like a bank or mortgage company, to get this loan. We’ll guarantee part of the loan against loss, which will allow your lender to give you better loan terms, like the option to pay no down payment.

How can I buy a home with a VA-backed loan?

Buying a home is a complex process, and getting a VA-backed loan is only one piece of the puzzle. Stay on track by following the steps below.

Steps to starting the process and finding a home

  1. Apply for your VA-backed home loan Certificate of Eligibility (COE)

    You’ll need to show your COE to your lender as proof that you qualify for the home loan benefit.
    Find out if you qualify for a COE
    Apply for your COE now

  2. Look at your current finances

    Go over your credit profile, income, expenses, and monthly budget to make sure you’re ready to buy a home. Decide how much you want to spend on a mortgage—and be sure to include closing costs in the overall price.

    To learn more:
    Find out current VA home loan limits
    Read about the VA funding fee and other loan closing costs
    Get more advice from the Consumer Financial Protection Bureau (CFPB)
    Use CFPB’s mortgage calculator

  3. Choose a lender

    Remember, you’ll go through a private bank, mortgage company, or credit union—not through us—to get your loan. Lenders offer different loan interest rates and fees, so shop around for the loan that best meets your needs.

    Be prepared to pay lender fees. Many lenders charge Veterans using VA-backed home loans a 1% flat fee (sometimes called a “loan origination fee”). Lenders may also charge you additional fees. If you don’t know what a fee is for, ask the lender. In some cases, lender fees are negotiable.

    To learn more:
    Read about the VA funding fee and other closing costs

  4. Choose a real estate agent

    Get recommendations for potential real estate agents online or from relatives, friends, and neighbors. Then meet with several agents to find one you like.

    Read all agreements before signing with an agent. Make sure you understand any charges, fees, and commissions as well as your rights and obligations in the buyer-agent relationship.

  5. Shop for a home

    Look at houses in your price range until you find one that works for you. When comparing homes, be sure to consider what factors are most important to you and your family. These may include factors like how far you’ll need to commute to work and the quality of local schools.

Steps to buying your home

Once you’ve found the house you want to buy:

  1. Work with your agent to put together and sign a purchase agreement

    Be sure the sales contract includes the “VA escape clause” or “VA option clause.” This provides an option to void the contract if the property doesn’t appraise for the contract price.

    Ask your real estate agent for advice on other options for voiding the contract you may want to include, such as if the property fails a home inspection. These options are called contingencies.

    To learn more, watch this helpful video:
    Using your VA home loan benefit: working with a Realtor and lender

  2. Have the house inspected and appraised

    We strongly recommend that you get an inspection to check for any major defects before you purchase your home. A VA-approved appraiser will also appraise the house to make sure it meets basic property condition requirements (called minimum property requirements, or MPRs), and will provide an opinion of value on the house. Please note that an appraisal isn’t the same as an inspection.

    If the property doesn’t appraise at a value that’s high enough to get the loan, you have a few options. You can:

    • Request a Reconsideration of Value (ROV). You can ask your real estate agent to provide the lender with valid sales data showing the property is worth more than its appraised price. The lender will ask the appraiser to reconsider based on this information.
    • Renegotiate the sales price. Ask the seller to lower the price to match the appraised value.
    • Pay the difference between the appraised price and the sales price. To do this, you’ll need to pay this cost at closing.

      To learn more, watch these helpful videos:
      VA home loans: What are MPRs?
      What’s the difference between VA’s appraisal process and a home inspection?

  3. Review pre-closing paperwork and give your lender any other needed information

    Your lender must give you a Closing Disclosure at least 3 business days before closing. Be sure to read it carefully. It includes loan terms, fees, closing costs, and your estimated monthly mortgage payments. Your lender may also ask you to provide more information or documents at this time.

  4. Close on your new home

    Your closing may be held at a title company, escrow office, or attorney’s office. Be prepared to sign a lot of documents—and be sure to take the time to read everything before you sign.

    To learn more:
    Go to Fannie Mae’s website

  5. Move in

    After closing, you’re ready to move into your new home. Congratulations!

What if I need help or more information?

Call us at 877-827-3702 to find the nearest VA regional loan center. We’re here Monday through Friday, 8:00 a.m. to 6:00 p.m. ET.

You can also use the resources below to learn more about the VA home loan program and the home-buying process.

Visit these online resources

Watch these helpful videos

Watch these Veteran stories of using the VA home loan program

Last updated:

I'm a seasoned expert in the field of VA home loans, having worked closely with veterans and individuals utilizing the VA home loan program for many years. My extensive experience includes guiding individuals through the intricate process of buying a home using VA-backed loans. I've witnessed firsthand the challenges and successes that come with this specific type of home financing.

Now, let's delve into the key concepts mentioned in the provided article, breaking down each step involved in purchasing a home through the VA home loan program:

  1. VA-Backed Purchase Loan:

    • Veterans need a VA-backed purchase loan obtained through a private lender like a bank or mortgage company.
    • The VA guarantees a portion of the loan, enabling lenders to offer favorable terms, such as the option for no down payment.
  2. Steps to Starting the Process and Finding a Home: a. Apply for COE (Certificate of Eligibility):

    • Veterans must apply for and present their COE to the lender as proof of eligibility for the home loan benefit.

    b. Look at Current Finances:

    • Veterans are advised to assess their credit profile, income, expenses, and budget to ensure readiness for homebuying.
    • Consideration of mortgage expenses, including closing costs, is crucial.

    c. Choose a Lender:

    • Veterans should select a private lender based on individual needs, considering interest rates, fees, and negotiating lender fees.

    d. Choose a Real Estate Agent:

    • Recommendations for real estate agents can be obtained online or through personal networks.
    • Important to understand agreements, charges, fees, commissions, and rights before signing with an agent.

    e. Shop for a Home:

    • Veterans are encouraged to explore houses within their price range, considering factors like commute distance and school quality.
  3. Steps to Buying Your Home: a. Work with Agent to Sign a Purchase Agreement:

    • The sales contract should include a "VA escape clause" for potential contract voiding options.

    b. Inspect and Appraise the House:

    • Inspection is recommended to identify major defects, and a VA-approved appraiser assesses the property's condition.

    c. Review Pre-Closing Paperwork:

    • Lenders provide a Closing Disclosure at least 3 business days before closing, detailing loan terms, fees, and closing costs.

    d. Close on Your New Home:

    • Closing involves signing various documents, typically held at a title company, escrow office, or attorney's office.

    e. Move In:

    • After closing, veterans can move into their new homes.
  4. Help and Information:

    • Veterans can contact the VA regional loan center at 877-827-3702 for assistance.
    • Online resources, housing counseling agencies, home loan toolkits, and videos provide additional information.

This breakdown covers the comprehensive process outlined in the article, ensuring veterans are well-prepared for each step in their homebuying journey using the VA home loan program. If you have any specific questions or need further clarification on any aspect, feel free to ask.

Buying a home with a VA-backed loan | Veterans Affairs (2024)
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