A VA loan is a mortgage loan made by an approved lender and guaranteed by the Department of Veterans Affairs. They are made available to eligible veterans, those currently serving in the military, and, in some case, their spouses.
A VA loan differs somewhat from a standard mortgage. Even though it is provided through a private lender, the federal government guarantees a portion of the principal. That means that the Department of Veterans Affairs backs the loan, so if the borrower defaults on it, the lender is protected. Borrowers who are eligible for a VA loan are permitted to have a small, or sometimes non-existent, down payment and still get a mortgage. This is the biggest advantage of a VA loan. Be sure to ask your lender what its down payment requirements are when requesting a VA loan.
Some of the requirements for a VA loan are standard, as with any loan: good credit, enough funds for payments, etc. For example, there is a minimum credit score requirement, as well as income requirements for getting a VA loan. You must also be eligible though your affiliation with the military. To see a full list of eligibility requirements, visit the Department of Veterans Affairs website. This site also answers many specific questions about the program.
- as defined by Lending Tree