5 Common Misconceptions About the VA Home Loan Program

Kevin Guerrero
Published on April 18, 2016

5 Common Misconceptions About the VA Home Loan Program


The VA home loan program is a great way for qualified veterans to finance a home with no money down. But what you may not know is what I didn’t know (and I was in the service for over twenty years)…keep reading and I will uncover 5 common misconceptions about the program. This info may come in handy when you go to finance your next purchase.

So, here are some things I learned from the friendly folks at Fairway Mortgage.


Misconceptions debunked


  1. You can only borrow up to a certain limit on a VA home loan. Actually, there is no limit as long as you are prepared to put some money down. The VA does limit the amount of liability they will assume and this is what limits the amount you can borrow with no money down. The VA aligns with the Federal Housing Administration (FHA) maximums. Here is the link to the FHA website (.pdf file) with a list of all the counties in the U.S: Conforming Loan Limits.  For Colorado Springs (El Paso County) the maximum amount an eligible veteran can receive is $417,000. You can borrow above this amount but will be required to put 25% down on the amount over $417,000. So, for example, for a $500,000 home you would need to put down 25% of $83,000, or $20,750.
  2. There is always a mandatory VA funding fee. The VA funding fee is an amount between 1.25% and 3.3% depending on the amount of money you put down and whether you’ve used the benefit before. On a $300,000 loan this could be between $3,750 and $9,000. What most veterans don’t realize is that if you are just 10% disabled, the VA funding fee is completely waived. There are a lot of veterans out there at this level.
  3. VA loan is a one-time benefit. Ok, not a lot to say on this one except to report that you can use your VA benefit multiple times. Qualified Veterans can use the VA Home Loan Guaranty Program over and over again. In fact, you can even have more than one active VA Home Loan at the same time. Liability limits still apply which can limit the maximum amount as discussed above.
  4. You need excellent credit to qualify. Actually, the VA does not have a minimum credit score, but lenders participating in the program are looking for a minimum credit score of just 620 for a VA home loan. This is considered a fair credit score (two below excellent).
  5. Active Duty personnel must have orders to the location where they are buying. Because the VA Home Loan program is designed for owner/occupiers, many service menPEO_Soldier_portrait and women believe they need to have orders to their next location to qualify. A very reputable local Mortgage lender told me a story about an active duty family stationed in Japan. Turns out the family couldn’t stand it there. The serviceman moved his family to a stateside location and even though he did not have orders, they qualified for a VA home loan purchased for his family to occupy. He completed his tour overseas in an “unaccompanied” status.


I hope this helped clear up any misconceptions you may have had on this great program. Here is a good Veterans Administration video that describes the benefit of the home loan program.



About Us

5 Common Misconceptions About the VA Home Loan Program
Please use a valid email.
Please fill in all fields.
view now