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Five Facts You Should Know About VA Home Loans

Known by most real estate experts as the best government-guaranteed home loans, the popularity of VA home loans has gone up in recent years. In fact, the VA guaranteed over one million loans in the year 2020, amounting to roughly $363 billion worth of money lent to help veterans become homeowners.

However popular, many veterans and active-duty service members do not use this fantastic benefit. This article covers five facts that applicants that meet all VA home loan qualifications must know about VA loans.

#1 No Money Down Required

Having the ability to take out a loan without making an initial down payment is the appealing part of this loan. This benefit is especially significant because most conventional home loans have a down payment requirement of 20%, which amounts to tens of thousands paid upfront.

However, it is essential not to get carried away and buy a home expecting not to pay a single penny upfront. Some payments are still required even without a mandatory down payment. These include an earnest money deposit, home inspection, and appraisal fees.

Even with those payments, not having a down payment of 20% is still a significant upside to VA home loans. Other benefits offered include lower interest rates, low monthly mortgage payments, and no mortgage insurance premiums.

#2 Offers Construction and Refinance Loans

Besides offering loans to purchase a home, VA loans also offer refinance loans and construction loans.

Construction Loan

VA Construction Loans offer the same benefits that VA home loans offer, although the applicant must meet some additional requirements before taking out the loan. The VA requires preparation of the land before construction can begin.

Refinance Loan

Refinance loans offered by the VA come in two forms, Interest Rate Reduction Refinance Loans (IRRRL) and Cash-Out Refinance loans. IRRR Loans give applicants the ability to borrow up to 100% of the active loan amount, to refinance their existing VA loans on better terms. This can either be from a lower interest rate or from an adjustable rate to a fixed rate.

 In contrast, the cash-out refinance loan allows the borrower to take the cash from their home equity to use as they please. Some common uses include financing home improvements, financial emergencies, and paying off debts.

#3 Adaptive Housing Grant

VA loans also offer adaptive housing grants, which can fund the remodeling or construction of a home to make it livable for veterans who have a service-related injury that limits their mobility.

here are two adaptive housing grants, namely Specially Adapted Housing (SAH) Grant and Special Home Adaptation (SHA) Grant. Both grants offer different amounts in allowances and have different disability requirements. SAH grants offer up to $101,754 for applicants who meet eligibility requirements, while SHA grants offer up to $20,387. Borrower can use the grant up to six times, as little or as much as they want per year.

#4 Reusable Benefits

As the header states, VA home loans are reusable, which means that eligible applicants can use the benefits offered by the VA an unlimited number of times as long as previously active loans are paid off or assumed by another buyer.

Eligible applicants have a specific amount of entitlement, which is the amount insured by the VA if the borrower ends up defaulting on their loan. What is notable about this entitlement is that it is reusable, just like all other VA benefits, for an unlimited number of times.

#5 Lifelong Benefits

Once an applicant meets the eligibility requirements outlined by the VA, they can use those benefits when they are ready without having to worry about a time limit. However, at the time of their founding, VA loans were limited to a two-year post-service time window which lasted until the signing of the Veteran’s Housing Benefits Improvement Act in 1970, making it a lifelong benefit.


Hopefully, with this information, veterans, active-duty service members, and eligible spouses will use their VA home loans in the future purchase of their home and save money at the same time. The quality of these loans is a further testament to the government’s commitment to rewarding veterans and active-duty service members for their services.

Phil Georgiades is the CLS of VA, a government-sponsored brokerage specializing in VA home loans. He has more than 22 years of experience working in real estate. For more information about VA home loans or submit a VA loan application, call us at (877) 432-5626.

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