VA Home Loan Guide for Veterans Day: Benefits and Costs
A VA home loan is a mortgage backed by the U.S. Department of Veterans Affairs for eligible veterans, service members, and some surviving spouses. Most borrowers can buy with no down payment and no monthly mortgage insurance. In exchange, most pay a one-time VA funding fee. This Veterans Day, here’s how the benefit works and what it costs.
Key Takeaways
- No down payment is often required for borrowers with full entitlement.
- No monthly mortgage insurance, ever. Most borrowers pay a one-time funding fee instead.
- Funding fee: 2.15% of the loan for a first-time purchase with less than 5% down (VA.gov).
- Rates: Mortgage News Daily’s 30-year VA index was 7.04% on October 20, 2026.
- Veterans with a service-connected disability rating are usually exempt from the funding fee.
Why Veterans Day Is a Good Time to Talk About the VA Loan
Veterans Day falls on November 11. It began as Armistice Day, marking the end of World War I fighting on the 11th hour of the 11th day of the 11th month in 1918. Congress renamed it Veterans Day in 1954 to honor veterans of all wars.
The home loan benefit is almost as old. It started with the Servicemen’s Readjustment Act of 1944, better known as the GI Bill, signed by President Franklin D. Roosevelt on June 22, 1944. More than 80 years later, it’s still one of the most valuable benefits a veteran can use.
What Is a VA Home Loan and How Does It Work?
The VA doesn’t usually lend the money itself. Instead, it guarantees part of a loan made by a private lender. That guarantee lowers the lender’s risk, which is why VA loans can offer such friendly terms.
A few terms to know:
- Certificate of Eligibility (COE): The document that shows a lender you qualify for the benefit.
- Entitlement: The amount the VA will guarantee. If you have full entitlement, VA doesn’t cap your loan amount, though lenders still look at what you can afford.
- VA funding fee: A one-time charge, paid at closing or rolled into the loan, that helps keep the program running without down payments or monthly mortgage insurance.
Who Qualifies for a VA Loan?
Eligibility depends on your service history. In general, these groups may qualify:
- Veterans who meet minimum service requirements
- Active-duty service members
- Many National Guard and Reserve members
- Certain surviving spouses
You’ll still need to meet the lender’s credit and income standards. The home must also be your primary residence.
How Much Does a VA Loan Cost?
The VA Funding Fee
According to VA.gov (rate charts effective April 7, 2023), purchase funding fees are:
| Down payment | First use | After first use |
|---|---|---|
| Less than 5% | 2.15% | 3.3% |
| 5% or more | 1.5% | 1.5% |
| 10% or more | 1.25% | 1.25% |
Example: On a $300,000 first-time VA purchase with no money down, the funding fee would be 2.15%, or $6,450. You can pay it at closing or add it to the loan.
Who Is Exempt?
You won’t pay the fee if you receive VA compensation for a service-connected disability (or are eligible for it but receive retirement or active-duty pay instead). Surviving spouses who receive Dependency and Indemnity Compensation are exempt too, along with a few other groups listed on VA.gov.
Closing Costs and Seller Help
Sellers can pay some or all of your closing costs. The VA limits seller concessions to 4% of the home’s reasonable value, but credits for normal closing costs aren’t capped. On a purchase, the only cost you can finance into the loan is the funding fee.
What Are VA Loan Rates Right Now?
Rates move every day, so treat these as a snapshot:
- Mortgage News Daily (Oct. 20, 2026): 30-year VA at 7.04%, 30-year FHA at 7.02%, and a top-tier 30-year conventional at 7.40% (Mortgage News Daily).
- Freddie Mac PMMS (week of Oct. 15, 2026): The 30-year conventional average was 7.40% (Freddie Mac).
VA rates often run a bit below conventional rates. Your own rate will depend on your credit, loan amount, and other factors. Want to know why rates jump around so much? Read our explainer, What Moves Mortgage Rates?
What About Refinancing With a VA Loan?
If you already have a VA loan, an Interest Rate Reduction Refinance Loan (IRRRL) may help lower your rate or switch from an adjustable to a fixed rate. The VA funding fee on an IRRRL is 0.5%. Whether it makes sense depends on today’s rates compared with yours.
How Do I Get Started With a VA Loan?
- Gather your service documents. A DD-214 is common for veterans.
- Get your COE. A lender can often pull it for you online.
- Get preapproved so you know your budget.
- Compare offers. A broker can shop several lenders at once. See our guide, Mortgage Broker vs. Bank.
Coastal Funding Corporation also offers conventional, FHA, USDA, and jumbo loans, so we can compare a VA loan side by side with other options.
Frequently Asked Questions
Who is eligible for a VA home loan?
Eligible veterans, active-duty service members, many National Guard and Reserve members, and some surviving spouses can qualify. You’ll need a Certificate of Eligibility (COE), which a lender can often request for you.
Do VA loans require a down payment?
Often, no. Borrowers with full entitlement can usually buy with no down payment, though the lender still reviews credit, income, and the appraisal.
Do VA loans have mortgage insurance?
No. VA loans don’t charge monthly mortgage insurance. Most borrowers pay a one-time VA funding fee instead, which can be financed into the loan.
How much is the VA funding fee?
For a first-time purchase with less than 5% down, it’s 2.15% of the loan amount. It’s 3.3% after first use with less than 5% down, and lower with 5% or 10% down, per VA.gov.
Who doesn’t have to pay the VA funding fee?
Veterans receiving or eligible for VA disability compensation, eligible surviving spouses receiving DIC, and certain others such as qualifying Purple Heart recipients on active duty are exempt.
Are VA loan rates lower than conventional rates?
Often. On October 20, 2026, Mortgage News Daily’s index showed the 30-year VA at 7.04% versus 7.40% for a top-tier 30-year conventional loan. Your rate depends on your own profile.
Thank You for Your Service. Let’s Talk VA Loans.
Ready to put your VA benefit to work? Call Coastal Funding Corporation at (833) 457-6500 or visit www.cfcmtg.com to talk with a licensed loan officer.
About Coastal Funding Corporation
Coastal Funding Corporation (NMLS 103035) is a mortgage broker. We compare loan options from multiple wholesale lenders for purchases and refinances on primary residences in Florida, South Carolina, and Tennessee, and we offer DSCR investment-property loans nationwide. This article was written by our team and reviewed for accuracy as of the date shown.
Coastal Funding Corporation | NMLS 103035 | 534 S. Navy Blvd, Pensacola, FL 32507 | (833) 457-6500 | www.cfcmtg.com. Equal Housing Opportunity. This is not a commitment to lend. All loans are subject to credit approval, underwriting guidelines, and property eligibility. Rates, terms, and programs are subject to change without notice. Rate and market figures cited are third-party data as of the dates shown and are not quotes or offers from Coastal Funding Corporation. Primary-residence loans offered in FL, SC, and TN; DSCR loans available nationwide. Verify our license at NMLS Consumer Access.