VA Loan Tips: 9 Ways Veterans Can Get Approved and Save More

Written by Samantha SheltonNMLS 1647301Updated October 2026

Veterans who get the most out of a VA loan do three things before writing an offer: pull a Certificate of Eligibility, find out how much entitlement is left, and confirm whether they owe the VA funding fee at all. That last question is worth real money, because the funding fee runs 1.25% – 3.3% of the loan amount on a purchase, drops to 0.5% on an Interest Rate Reduction Refinance Loan, and falls to zero for veterans receiving VA compensation for a service-connected disability.¹

The rest of the savings come from knowing which rules belong to VA and which belong to your lender. Almost every hard cutoff you’ll hear quoted (a 620 credit score, a 90% ceiling on cash-out) is a lender overlay, and overlays change from lender to lender. Here are nine tips in the order they matter, from our loan types and programs guide and the VA loans hub.

Key takeaways:

• The funding fee is the largest variable cost in a VA loan: It runs 1.25% – 3.3% on a purchase and 0.5% on an IRRRL, and it disappears entirely for veterans receiving VA compensation for a service-connected disability.
• Full entitlement means no VA loan limit: VA guarantees 25% of a loan above $144,000 and, since January 1, 2020, publishes no maximum loan amount for a veteran with full entitlement. Your lender’s approval is the ceiling.
• VA sets no minimum credit score: VA’s buyer’s guide notes lenders typically look for 620 absent a large down payment, so the same file can be declined at one lender and approved at another, compare at least three.

The nine tips:

1. Pull your Certificate of Eligibility first
2. Find out how much entitlement you have left
3. Confirm your funding fee tier, or your exemption
4. Gather the documents that stall VA files
5. Pick a property VA will actually finance
6. Shop lenders, because VA sets no score floor
7. Use VA’s fee rules and the 4% concession cap
8. Plan around the occupancy requirement
9. Protect your entitlement on the way out

What is a VA loan, and why use it?

A VA loan is a mortgage made by a private lender and partially guaranteed by the Department of Veterans Affairs, which is what lets lenders offer it with no down payment and no mortgage insurance. VA guarantees $36,000 of basic entitlement on loans of $144,000 or less and 25% of the loan above that, the guaranty stands in for the down payment.

The rest: no down payment when the sales price is at or below the value VA establishes, a 1% cap on the lender’s origination fee, no prepayment penalty, and 15- or 30-year terms. VA also requires enough residual income left after your mortgage and other obligations, a second affordability test alongside your debt-to-income ratio. Our rundown of VA loan benefits for veterans goes line by line.

Who is eligible for a VA loan?

Eligibility comes down to service history, and VA alone determines it. Active-duty members generally qualify after 90 continuous days. Veterans who served during the Gulf War period (August 2, 1990 to the present) generally need 24 continuous months or the full period called to active duty, with shorter periods allowed for hardship, reduction in force, convenience of the government, or discharge for a service-connected disability. Service between September 8, 1980 and August 1, 1990 generally needs the same 24 continuous months. Earlier eras run 181 continuous days for the post-Vietnam period of May 8, 1975 to September 7, 1980, and 90 total days for Vietnam and Korea.

Certain surviving spouses qualify too, generally those eligible for or receiving VA Dependency and Indemnity Compensation. Beyond service, you must meet your lender’s credit and income standards and live in the home. See how to qualify for a VA loan.

1. Pull your Certificate of Eligibility first

The Certificate of Eligibility proves to a lender that you have the benefit and shows how much entitlement is left. There are exactly three ways to get one: request it online at VA.gov, have your lender pull it through VA’s Web LGY system, or mail VA Form 26-1880 to your regional loan center, VA notes mail takes longer.

Do this before you shop, not after you’re under contract. Entitlement questions are where VA files find trouble late, and a COE showing restored entitlement from a loan you paid off years ago is the difference between zero down and a down payment. Start at VA home loan eligibility and Certificate of Eligibility.

2. Find out how much entitlement you have left

Full entitlement means no VA loan limit. Since January 1, 2020, a veteran with full entitlement (a first-time user, or someone who sold the prior home and had the benefit restored) faces no VA-set loan limit and no VA-set down payment requirement, in any county, at any price. The cap on a given property is simply the lower of the appraised value or the purchase price.

Partial entitlement works differently. Keep a VA-financed home and buy another, and your remaining bonus entitlement is calculated from the county loan limit where you’re buying, minus what’s already tied up, which usually means a down payment on the amount above the covered portion. Our guide to buying a home with a VA loan shows how this plays out on a second purchase.

3. Confirm your funding fee tier, or your exemption

The VA funding fee is a one-time charge set as a percentage of the loan amount, and the rate depends on transaction type, down payment, and whether you’ve used the benefit before. These are VA’s rates effective April 7, 2023.

Run the math before deciding how much to put down. On a $300,000 purchase in Waterford with nothing down and first-time use, the fee is 2.15%, or $6,450, and it can be financed into the loan. Put 5% down and the loan drops to $285,000 and the fee to 1.5%, or $4,275. Use the benefit a second time with nothing down and it jumps to 3.3%, or $9,900, the argument for 5% down on a subsequent-use file.²

You owe nothing if any of these apply. VA waives the fee for veterans receiving VA compensation for a service-connected disability; those eligible for it but receiving retirement or active-duty pay instead; surviving spouses receiving Dependency and Indemnity Compensation; holders of a proposed or memorandum rating issued before closing; and active-duty members awarded a Purple Heart on or before the closing date.

4. Gather the documents that stall VA files

Two documents do most of the work: your DD Form 214 if you’ve separated, or a current Leave and Earnings Statement if you’re still serving. Everything else (pay stubs, W-2s, bank statements, self-employment returns) is the same paperwork any mortgage requires.

Service members near the end of an enlistment need one extra piece. If your contract ends close to your closing date, underwriting has to see a re-enlistment or extension, or documentation of the civilian income replacing military pay. On credit, VA is more forgiving than most expect: outside of bankruptcy, satisfactory credit is generally considered re-established after 12 months of satisfactory payments following the date the last derogatory item was satisfied.

5. Pick a property VA will actually finance

VA finances more property types than most buyers realize, but the list is a list: a single-family home, a townhouse, or a multi-family property of up to four units; a condo in a VA-approved project; a manufactured home and lot; or new construction.

Two traps are worth naming. Condos: VA maintains a list of approved projects, and if yours isn’t on it, the project must be submitted to VA for review before your loan can close, a delay measured in weeks. Multi-unit: a duplex, triplex, or fourplex is eligible only if you occupy one unit, and lenders that count the rental income toward qualifying typically want documented landlord experience or reserves first.

The appraisal is its own step. VA’s appraiser issues a Notice of Value, and if it comes in below your contract price you have four moves: request a Reconsideration of Value with supporting sales data, renegotiate, bring the difference in cash, or walk away under the VA escape clause and keep your earnest money. Construction follows a separate track, see VA construction loans.

6. Shop lenders, because VA sets no score floor

This is the tip that saves the most and gets followed the least. VA does not require a minimum credit score. VA’s own buyer’s guide says so, and adds that lenders typically want around 620 unless there’s a large down payment. That 620 is a lender overlay, not a VA rule, which means a veteran declined at one lender can be approved at another with the identical file. Same on cash-out refinances: VA publishes no 90% loan-to-value cap, so ask each lender what theirs is rather than treating it as a program rule.³

Compare on paper, not over the phone. Ask each lender for a Loan Estimate and set them side by side, the CFPB’s walkthrough of how to read a Loan Estimate shows which lines actually differ. And shop in a tight window: VA notes multiple mortgage credit checks inside 45 days are recorded as a single inquiry.

7. Use VA’s fee rules and the 4% concession cap

VA already limits what a lender can charge: the origination fee is capped at 1% of the loan amount, and on a purchase, closing costs and the origination charge generally cannot be rolled into the loan. The funding fee is the exception. It can be financed. Refinances are more flexible, and allowable fees and points may be included in the loan amount.

That leaves seller concessions as the main lever on cash to close. VA caps them at 4%, and the nuance is what counts against that cap:

• Counts toward the 4%: Prepaid closing costs, the VA funding fee, payoff of the veteran’s credit balances or judgments, and funds for a temporary buydown.
• Does not count toward the 4%: The seller simply paying ordinary closing costs (title insurance, title exam, appraisal, the origination fee) plus normal discount points.
• Anyone can pay your funding fee: VA allows the seller, the lender, or family gift funds to cover it if you aren’t already exempt.

8. Plan around the occupancy requirement

A VA loan has to buy a home you live in. VA makes occupancy a condition, not a preference, which rules out vacation homes and pure investment purchases. The rule is written as occupancy within a reasonable time after closing rather than a fixed date, and most lenders underwrite to a 60-day benchmark. Confirm the standard yours applies before you set a move date.

Occupancy is also why the four-unit allowance works the way it does: you can be a landlord with a VA loan as long as one unit is yours. And if you’re buying a second home while keeping the first, you must afford all your VA loans at once, and the new home must become your residence.

9. Protect your entitlement on the way out

The benefit is reusable, but only if the entitlement comes back to you. VA restores previously used entitlement when one of three things is true: you sold the home and the prior loan was repaid in full; another qualified veteran assumes your loan and substitutes their own entitlement for it; or you paid the prior loan in full but kept the home, and that third route is a one-time option.

Here’s the costliest misunderstanding. Anyone, including a non-veteran, can assume a VA loan with servicer approval, and in that case your entitlement stays tied to that loan. It does not come back when the buyer takes over the payments. Only a qualified veteran substituting their own entitlement releases yours. The assumption carries a 0.5% funding fee.

On the refinance side, an Interest Rate Reduction Refinance Loan is the cheapest way into a lower rate, at a 0.5% funding fee. VA’s seasoning rule is the later of two dates: 210 days after the first payment due date on the loan being refinanced, and the date your sixth monthly payment is made. Fees must also be recouped within 36 months of closing, the guardrail against serial refinancing. Rules do get revisited; we track what’s moving in proposed changes to VA loan programs.

What Michigan veterans should know

Three Michigan-specific items change the math on a VA file here.

• Condo approval is the metro Detroit and Grand Rapids bottleneck: Both downtown cores and Michigan’s inner-ring suburbs carry heavy condo inventory, and only projects on VA’s approved list finance without an extra step. Have your agent check the project’s status the week you tour it.
• Michigan bills property taxes twice, and it moves your escrow: Summer taxes are levied July 1 and winter taxes billed December 1, so where your closing date falls between those bills drives how many months go into your initial escrow deposit. Two identical VA files closing in June and October show different cash to close.
• A disability rating can help twice: The federal funding fee waiver is worth $6,450 on a $300,000 zero-down purchase at the 2.15% first-use rate. Michigan separately offers a full property tax exemption for qualifying disabled veterans under MCL 211.7b, claimed by filing Treasury Form 5107 with your local assessing officer after January 1 and before December 31 of the year claimed, and because escrow is built from the tax bill, an approved exemption lowers your monthly payment too. Once granted as to taxes levied on or after January 1, 2025, it continues without reapplication until rescinded or denied. Confirm eligibility with your assessor or the Michigan Department of Treasury.⁴

FAQ: VA loan tips

Here are answers to common questions about getting the most out of a VA loan.

What credit score do I need for a VA loan?

VA sets no minimum credit score. VA’s buyer’s guide notes lenders typically want around 620 unless there’s a large down payment, but that floor is a lender overlay rather than a VA rule, so it varies meaningfully between lenders. A veteran declined at one lender may qualify at another. Our guide to how to qualify for a VA loan covers what underwriting reviews.

Can I use a VA loan to buy a multi-unit property?

Yes. VA loans allow properties with up to four units as long as you occupy one as your primary residence. Rental income from the others may help you qualify, though lenders usually want documented landlord experience or reserves before counting it. Condos are eligible too, but the project must appear on VA’s approved list or be submitted for review. See buying a home with a VA loan for how that fits the timeline.

Do VA loans cover closing costs?

Not entirely, but VA limits them. The lender’s origination fee is capped at 1% of the loan amount, and the funding fee can be financed rather than paid at the table. Cover the rest with seller concessions of up to 4%, a lender credit in exchange for a slightly higher rate, or gift funds. VA lets the seller, the lender, or family pay the funding fee if you aren’t exempt. More in VA loan benefits for veterans.

Can I have two VA loans at the same time?

Yes, using what remains of your entitlement. Veterans who keep a first home as a rental and buy a second use partial entitlement, which usually means a down payment on the amount above the covered portion, with the county loan limit driving the calculation. VA also requires that you afford both loans and that the new home becomes your residence. Selling the first and repaying that loan restores full entitlement, the VA loans hub has the rest.

The bottom line on using your VA loan

The three moves that separate a smooth VA file from an expensive one all happen before you write an offer: pull your Certificate of Eligibility, confirm how much entitlement is left, and find out whether you owe the funding fee at all. That fee runs 1.25% – 3.3% of the loan on a purchase, 0.5% on an IRRRL, and $0 for veterans receiving VA compensation for a service-connected disability. Everything after that gets easier once those answers are in writing, and keep track of which limits are VA’s and which are your lender’s, because the lender ones move when you shop.

If you’re ready to put your VA benefit to work, talk to Align Lending. We’ll shop your scenario across our lender network and show you the funding fee, the credit requirements and the pricing side by side. Call 248-506-5727 or start online today.

Footnotes:

1. Align Lending works with VA-approved lenders and is not endorsed or sponsored by the U.S. Department of Veterans Affairs or any government agency. Return to text.

2. Example figures in this article are hypothetical and for educational purposes only; they do not constitute an advertisement of credit terms or a rate quote under federal or state lending laws. Your funding fee, rate and terms depend on your application, your entitlement status and market conditions, and will be itemized on your Loan Estimate and Closing Disclosure. Return to text.

3. Credit score floors, loan-to-value ceilings on cash-out refinances, reserve requirements and rental-income documentation standards described here are set by lenders in Align’s network, not by VA, and vary by lender and by file. Return to text.

4. This is general information, not tax or legal advice. Property tax exemption eligibility, forms and deadlines are set by Michigan law, administered locally, and subject to change. Confirm your situation with your local assessor, the Michigan Department of Treasury, or a qualified tax professional. Return to text.

Figures current as of August 2026; verify with the linked source before relying on them. Sources: VA funding fee rates effective April 7, 2023 for purchase and construction loans (2.15%, 1.5% and 1.25% first use; 3.3%, 1.5% and 1.25% subsequent use), cash-out refinance (2.15% and 3.3%), IRRRL (0.5%), and the funding fee exemption categories, U.S. Department of Veterans Affairs, “VA funding fee and loan closing costs.” No VA-set maximum loan amount with full entitlement, $36,000 basic entitlement on loans of $144,000 or less, 25% guaranty above that amount, maximum loan equal to the lower of appraised value or purchase price, and remaining bonus entitlement based on the county loan limit, U.S. Department of Veterans Affairs, “VA home loan limits.” No VA minimum credit score with a typical lender expectation of 620 absent a large down payment; residual income requirement; eligible property types including multi-family up to four units and condos in VA-approved projects; VA-approved condo list and project submission for unlisted projects; 1 percent loan origination fee; closing costs and origination not financed on purchase loans; funding fee financeable and payable by seller, lender or gift funds; 4% seller concession cap; assumption funding fee of 0.5%; entitlement restoration on sale and full repayment, on substitution of entitlement by a qualified veteran, or as a one-time option after paying the prior loan in full; entitlement remaining with the loan when a non-veteran assumes; no loan limits or down payment requirement for full-entitlement borrowers as of January 1, 2020; satisfactory credit generally re-established after 12 months of satisfactory payments following the date the last derogatory item was satisfied; COE request by VA.gov, lender Web LGY or VA Form 26-1880 by mail; multiple mortgage credit inquiries within 45 days counted as one; no prepayment penalty; 15- and 30-year terms; Notice of Value, Reconsideration of Value and the VA escape clause, U.S. Department of Veterans Affairs, “VA Home Loan Guaranty Buyer’s Guide.” Service eligibility periods and surviving spouse eligibility, U.S. Department of Veterans Affairs, “Eligibility requirements for VA home loan programs.” Items counting and not counting toward the 4% seller concession limit, VA Lender’s Handbook, VA Pamphlet 26-7, Chapter 8. IRRRL seasoning of the later of 210 days after the first payment due date and the date of the sixth monthly payment, and recoupment of fees within 36 months of closing, 38 U.S.C. § 3709 and VA Circulars 26-18-13 and 26-19-22. Michigan summer property tax levy collected and due July 1, and the December 1 winter levy due date, MCL 211.44a. Michigan disabled veterans property tax exemption, Form 5107 filing with the local assessing officer after January 1 and before December 31 of the year claimed, and continuation without reapplication for exemptions granted as to taxes levied on or after January 1, 2025, MCL 211.7b(2).

This article is for informational purposes only and is not intended to provide legal, financial, or tax advice. VA program rules, funding fee rates, county loan limits, lender overlays and state property tax provisions change; confirm your figures with VA, your Loan Estimate and Closing Disclosure, and a qualified professional. Figures shown are illustrative, are not a rate quote or an offer of credit, and are subject to change. Align Lending is an independent Michigan mortgage broker, NMLS #2041154, and is not endorsed or sponsored by the U.S. Department of Veterans Affairs or any government agency.

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