How to Get a VA Home Loan
By Aaron Eller, Founder — Cash Offer Man | St. Louis, Missouri
May 12, 2026
The VA home loan is the single most powerful mortgage product available in the American housing market — and it is available to millions of veterans and service members who either do not know they qualify, do not fully understand its advantages over other loan types, or have been talked out of using it by lenders who prefer to sell them something else.
The numbers back this up: in fiscal year 2024, the Department of Veterans Affairs guaranteed approximately 400,000 VA home loans totaling more than $144 billion. Yet the Census Bureau estimates that approximately 18 million veterans live in the United States, and a substantial fraction of them who have purchased homes in recent years used conventional or FHA financing despite their VA eligibility. Many of those borrowers paid tens of thousands of dollars more over their loan terms than they needed to.
I am Aaron Eller, founder of Cash Offer Man, a local home buying company in St. Louis. I work with buyers at every stage of the financing decision. When a veteran buyer sits across from me and mentions they are considering FHA or conventional financing, my first question is always: have you looked at your VA benefit? In most cases, the VA loan is the correct answer. In this article, I will tell you exactly why — and exactly how to get one.
What Is a VA Home Loan?
The History and Scale of the Program
The VA home loan program was created by the Servicemen’s Readjustment Act of 1944 — commonly known as the GI Bill. President Franklin D. Roosevelt signed it into law on June 22, 1944, less than three weeks after D-Day. The program was designed to help the 16 million returning World War II veterans transition back into civilian life, with homeownership as a central pillar of that transition.
Since 1944, the VA has guaranteed more than 28 million home loans totaling more than $3.9 trillion. The program has been credited by economists and housing researchers with enabling a generation of veterans to build the wealth and stability that defined the American middle class of the 1950s and 1960s.
The modern VA loan program is administered by the U.S. Department of Veterans Affairs through the VA Home Loan Guaranty program (38 U.S.C. Chapter 37). The VA does not lend money directly — it guarantees a portion of the loan made by a private VA-approved lender. This government guaranty is what enables lenders to offer the extraordinarily favorable terms the program provides.
What the VA Guaranty Actually Means
When the VA guarantees a loan, it promises to repay the lender a portion of the loan amount if the borrower defaults. This guaranty — currently 25% of the loan amount for most loans above $144,000 — is the mechanism that eliminates the lender’s need for Private Mortgage Insurance (PMI) and enables the no-down-payment feature.
The guaranty entitlement is the key concept. Each eligible veteran has a basic entitlement of $36,000 (which guarantees loans up to $144,000) and a bonus entitlement that covers 25% of loans above $144,000 up to the conforming loan limit. For most veterans purchasing a standard home, the combined entitlement covers the loan fully — meaning no down payment is required up to the conforming loan limit of $806,500 in 2026.
Who Qualifies for a VA Home Loan?
Military Service Requirements
VA eligibility is based on your character of discharge and the length and type of service. The basic service requirements are:
Active Duty Veterans:
- 90 consecutive days of active service during wartime, OR
- 181 days of continuous active service during peacetime, OR
- 24 months of continuous active duty service (the post-1980 standard for most veterans)
National Guard and Reserve Members:
- 6 years of service in the National Guard or Selected Reserve, OR
- 90 days of active duty service under Title 10 orders, with at least 30 of those days consecutive
Surviving Spouses: Unremarried surviving spouses of veterans who died in service or from a service-connected disability are eligible. Spouses of service members listed as missing in action or prisoners of war may also qualify.
Character of Discharge: To receive VA loan benefits, your service must have ended under conditions other than dishonorable. Honorable discharge is the clearest path to eligibility. General discharge under honorable conditions and other-than-honorable discharges may qualify depending on the circumstances — veterans with non-honorable discharges can request a Character of Discharge determination from the VA, which evaluates the specific circumstances of their service and separation.
How Many People Actually Use VA Loans?
The gap between VA eligibility and VA loan usage reveals a significant education deficit in the veteran community. We are trying to educate more people to take advantage of the resources that are available, buying your first house can be easier and more affordable than many people think.
By the numbers:
- Approximately 18 million veterans live in the United States as of 2026
- Approximately 2.3 million active duty service members and National Guard/Reserve members add to the eligible population
- In fiscal year 2024, approximately 400,000 VA loans were originated — representing a fraction of the eligible population that purchases homes each year
Compared to other loan types:
- In fiscal year 2024, FHA loans accounted for approximately 15.8% of all mortgage originations
- Conventional loans accounted for approximately 69% of originations
- VA loans accounted for approximately 8.2% of originations
The VA’s own research indicates that eligible veterans who choose conventional financing over VA loans leave an average of $40,000 in financial benefit unrealized over the life of a typical 30-year loan, primarily through PMI costs that VA would have eliminated.
Why veterans choose other loan types despite VA eligibility:
- Lack of awareness that they qualify
- Misconceptions about VA property requirements slowing the transaction
- Seller preference for non-VA offers in competitive markets (a diminishing concern as VA loans have become more competitive)
- Lender steering toward products with higher margins
- Veterans who have used VA loans before and incorrectly believe they have “used up” their benefit
How to Get a VA Home Loan: The Step-by-Step Process
Step 1: Obtain Your Certificate of Eligibility
The Certificate of Eligibility (COE) is the official VA document that confirms your entitlement and the amount of guaranty available. You must have a COE before a VA lender can process your loan.
Three ways to obtain your COE:
Online through eBenefits: The VA’s eBenefits portal at ebenefits.va.gov allows many veterans to obtain their COE immediately online. This is the fastest method for veterans with straightforward service records.
Through your lender: Most VA-approved lenders can access the VA’s automated system (WebLGY) and obtain your COE directly during the loan application process. This is often the easiest path — let your lender handle it.
By mail: Complete VA Form 26-1880 (Request for Certificate of Eligibility) and mail it to the VA Eligibility Center in Winston-Salem, North Carolina. This method takes 2 to 6 weeks.
What you will need: Your DD-214 (Certificate of Release or Discharge from Active Duty) for veterans. For active duty members, a Statement of Service signed by your commanding officer, adjutant, or personnel officer.
The COE and remaining entitlement: If you have previously used a VA loan that has been paid off (through sale or refinance), your entitlement is typically restored and your new COE will show full available entitlement. If you currently have an outstanding VA loan, your COE will show your remaining entitlement — which may be sufficient for a second VA loan depending on the amount.
Step 2: Choose a VA-Approved Lender
The VA does not lend directly. You must work with a VA-approved private lender — a bank, mortgage company, or credit union that has been approved by the VA to originate VA-guaranteed loans.
Key considerations in choosing a VA lender:
VA loan volume and experience: Lenders who originate high volumes of VA loans — Veterans United, Navy Federal Credit Union, USAA, Rocket Mortgage, Freedom Mortgage — have systems, staff, and processes specifically optimized for VA transactions. They understand the VA appraisal process, the specific underwriting requirements, and the documentation the VA requires. A lender who occasionally does VA loans alongside primarily conventional originations may struggle with VA-specific issues.
Interest rates vary significantly: The VA does not set a maximum interest rate for VA loans. Rates are set by individual lenders, and the spread between the lowest and highest VA rates on any given day can exceed 0.75%. Shop at least three lenders and compare Loan Estimate documents (which provide apples-to-apples rate and fee comparisons) before committing.
Local VA resources in St. Louis: The St. Louis VA Regional Office, located at 400 South 18th Street in St. Louis, handles regional VA benefits and can provide guidance on the loan eligibility determination process. The VA Medical Center at 915 North Grand Boulevard (John Cochran Division) also has veterans service staff who can direct veterans to loan resources.
Step 3: Get Pre-Approved
VA loan pre-approval requires the same basic documentation as any mortgage application: income documentation (pay stubs, W-2s, tax returns for self-employed), employment verification, bank statements, and your COE. Having a pre approval when offering on houses can make your offer stronger with St. Louis’ low home inventory making it a sellers market. Having everything ready to go so the seller has peace of mind knowing the house will be sold and not have to hope for the buyer to get approved with a loan makes a big difference.
The VA’s specific underwriting considerations:
No minimum credit score from VA: The VA itself does not set a minimum credit score. Individual lenders typically require 580 to 620, with most lenders preferring 620 or above for the most favorable rates and smoothest process. If your credit score does not meet the lenders requirements, you can still buy a home with bad credit with alternative programs and lenders who lend on higher risk individuals.
Residual income requirement: This is the VA’s unique underwriting tool and one of its most consumer-protective features. Rather than (or in addition to) DTI ratio analysis, VA underwriting calculates the borrower’s residual income — the monthly income remaining after all major obligations (housing, debt payments, taxes) are paid. Minimum residual income requirements vary by family size and region. For a family of four in the Midwest using a $200,000 VA loan, the required monthly residual income is approximately $1,003.
Residual income analysis has been credited by housing researchers as one of the reasons VA loans have the lowest foreclosure rate of any major loan program — consistently 30% to 50% lower than FHA and conventional foreclosure rates over multiple economic cycles.
Debt-to-income ratio: While the VA does not have a hard DTI maximum, most VA lenders prefer to see a back-end DTI below 41%. DTIs above 41% require additional compensating factors — significant residual income, strong credit history, or substantial assets.
Step 4: Find a Property and Get a VA Appraisal
VA loans can be used to purchase single-family homes, condominiums (in VA-approved condo projects), multi-family properties up to 4 units (if the veteran occupies one unit), and manufactured homes on permanent foundations (meeting specific VA requirements).
The VA appraisal: Every VA purchase loan requires a VA appraisal conducted by a VA-approved appraiser from the VA’s roster. The VA appraisal serves two purposes:
- Value determination: Establishing that the purchase price is supported by market value
- Minimum Property Requirements (MPRs): Confirming the property meets VA’s basic livability and safety standards
VA Minimum Property Requirements in St. Louis: Given the age of St. Louis’s housing stock, VA MPRs are a relevant consideration. Common MPR issues on older St. Louis homes:
- Working mechanical systems (HVAC, water heater, electrical) — a system that does not function will trigger an MPR condition
- Roof in acceptable condition — missing, damaged, or severely deteriorated shingles will require repair before VA funding
- No active water intrusion — basement water issues, active roof leaks, or foundation water penetration will require documentation and often repair
- Lead paint — pre-1978 homes (which is most of St. Louis’s housing stock) must have lead paint stabilized on all deteriorating surfaces
- Safe access — the property must have year-round access via public or private road
MPR issues create conditions that must be resolved before the VA will fund the loan. This is why sellers of distressed St. Louis properties sometimes receive guidance that VA financing is not suitable for their home in its current condition.
Step 5: Close the Loan
VA loan closing follows the same general process as any mortgage closing. One VA-specific element is the funding fee — a one-time fee paid to the VA that offsets the cost of the guaranty program.
VA Funding Fee for 2026:
| Borrower Category | First Use | Subsequent Use |
| Active Duty / Veteran, 0% down | 2.15% | 3.30% |
| Active Duty / Veteran, 5–10% down | 1.50% | 1.50% |
| Active Duty / Veteran, 10%+ down | 1.25% | 1.25% |
| National Guard / Reserve, 0% down | 2.40% | 3.30% |
Funding fee waiver: Veterans with a service-connected disability rating of 10% or higher are exempt from the funding fee entirely. This exemption also applies to surviving spouses receiving Dependency and Indemnity Compensation (DIC). For a disabled veteran purchasing a $250,000 home, this exemption saves $5,375 (2.15% of $250,000) in upfront costs.
The funding fee can be financed into the loan amount (rather than paid at closing), which is the most common approach. On a $250,000 purchase with 0% down, the funded fee of $5,375 brings the total loan to $255,375.
VA Loan vs. FHA vs. Conventional — Which Should You Choose?
This is the question that matters most for eligible veterans, and the answer in the vast majority of cases is clear.
The Three-Way Comparison on a $250,000 St. Louis Home
| Feature | VA Loan | FHA Loan | Conventional |
| Down payment | 0% | 3.5% ($8,750) | 5% ($12,500) |
| Upfront cost | 2.15% funding fee ($5,375) | 1.75% MIP ($4,375) | $0 |
| Monthly mortgage insurance | $0 | $114/month (0.55% annual) | $104/month (PMI until 20% equity) |
| Rate (approximate) | 6.75% | 7.00% | 7.25% (at 720 score) |
| Monthly PI | $1,628 | $1,576 (on $241,250) | $1,636 (on $237,500) |
| Monthly MI | $0 | $114 | $104 |
| Total monthly cost | $1,628 | $1,690 | $1,740 |
10-year total mortgage insurance cost:
- VA: $0
- FHA: $13,680 (and does not cancel automatically on loans with <10% down)
- Conventional (until 20% equity, approximately year 9): $11,232
The VA loan’s elimination of monthly mortgage insurance is the most significant long-term financial advantage. Over the first 10 years of the loan, a VA borrower saves approximately $13,680 compared to an FHA borrower and $11,232 compared to a conventional borrower with PMI.
Pros of VA Loans
No down payment required. This is the headline advantage that eliminates the single biggest barrier to homeownership for most first-time buyers. On a $250,000 St. Louis home, 0% down versus 3.5% FHA saves $8,750 in upfront cash.
No monthly mortgage insurance. Ever. For the life of the loan. FHA mortgage insurance premiums cost $114/month on a $250,000 home and do not cancel automatically for borrowers who put less than 10% down. The VA loan borrower is permanently free of this cost.
Competitive interest rates. VA loans consistently carry rates 0.25% to 0.50% below comparable FHA loans and often below conventional rates, because the VA guaranty reduces lender risk in a way that conventional PMI does not fully replicate from the lender’s perspective.
Lowest foreclosure rate of any major loan program. The residual income underwriting requirement and the VA’s financial counseling resources for struggling borrowers combine to produce foreclosure rates consistently 30% to 50% below FHA and conventional programs.
No prepayment penalty. VA loans cannot carry prepayment penalties. You can make additional principal payments or pay off the loan early at no cost.
Assumable. VA loans are assumable — a buyer can assume your VA loan’s existing rate and terms when you sell. In a future environment where rates have risen from current levels, a below-market assumable VA loan is a genuine selling asset.
Lifetime benefit with entitlement restoration. Using a VA loan does not permanently consume your VA benefit. When you sell the home and pay off the VA loan, your entitlement is restored and you can use it again.
Cons of VA Loans
The funding fee is a real upfront cost. For a first-time VA user at 0% down on a $250,000 loan, the 2.15% funding fee adds $5,375 to the loan amount. This is less than FHA’s upfront MIP ($4,375) on a smaller loan amount, but it is still a cost that disabled veterans should confirm whether they qualify to avoid.
VA property requirements can complicate purchases of distressed homes. In St. Louis, where a meaningful portion of the available inventory is older and may have deferred maintenance, the VA’s MPRs can create conditions that delay or complicate transactions. Sellers of distressed properties sometimes prefer non-VA offers because they do not want to manage MPR repairs. Cash Offer Man’s renovated properties are specifically designed to pass VA appraisal cleanly.
Condominiums require VA approval. The condominium complex must be on the VA’s approved condo list. Not all St. Louis condo developments are VA-approved, which can limit options for veterans preferring condominium living. The VA’s condo approval database is searchable at vip.vba.va.gov.
The secondary market perception. In competitive multiple-offer situations, some sellers or listing agents have historically viewed VA offers as more complex due to MPR requirements. This perception has diminished as VA loans have become better understood and VA-specific addenda have been standardized — but it occasionally still surfaces in St. Louis transactions.
When FHA Is Better Than VA
There is a narrow set of circumstances where FHA outperforms VA for an eligible veteran:
When the funding fee cost exceeds the lifetime PMI savings: For a veteran purchasing a lower-priced home (under $100,000) with a very short planned ownership period (2 to 3 years), the upfront funding fee may exceed the PMI savings before the sale. This scenario is uncommon in the St. Louis market.
When the property fails VA MPRs and the seller will not make repairs: If the home the veteran wants has conditions that fail VA MPRs and the seller refuses repairs or credits, FHA may have more flexible options depending on the specific condition.
When the veteran has a co-borrower who significantly benefits from a different program: Non-veteran co-borrowers on a VA loan receive the VA’s favorable terms, so this is rarely a disqualifying factor.
My honest opinion: For the overwhelming majority of eligible veterans purchasing in the St. Louis market, the VA loan is the correct choice. The elimination of mortgage insurance, the competitive rate, the no-down-payment feature, and the lifetime benefit restoration create a financial advantage that FHA and conventional simply cannot match for eligible borrowers. The funding fee is a real cost, but it is typically recovered within 2 to 3 years through the monthly PMI savings.
VA Loan Resources in St. Louis
St. Louis VA Regional Office: 400 South 18th Street, St. Louis, MO 63103. Phone: 1-800-827-1000. Handles VA benefit eligibility determinations, COE requests, and loan guaranty questions.
Missouri Veterans Commission: mvc.dps.mo.gov. Provides a network of veterans service officers (VSOs) throughout Missouri who can assist with VA benefit claims, eligibility questions, and referrals to VA-approved lenders. VSO services are free.
Veterans United Home Loans: Based in Columbia, Missouri, Veterans United is the largest VA loan originator in the United States by volume. They originate significant VA loan volume in the St. Louis market and have dedicated credit counseling resources for veterans who need to build their score to VA-qualifying levels.
eBenefits Portal: ebenefits.va.gov. The primary online portal for VA benefit management, including COE requests, loan tracking, and benefit verification.
Summary: VA Loan at a Glance
| Feature | VA Loan Data |
| Program established | June 22, 1944 (GI Bill) |
| Total loans guaranteed since 1944 | 28+ million |
| FY2024 VA loans originated | ~400,000 |
| Eligible U.S. veterans | ~18 million |
| VA market share of mortgage originations | ~8.2% |
| Minimum credit score (VA policy) | None |
| Minimum credit score (typical lender) | 580–620 |
| Down payment required | 0% |
| Monthly mortgage insurance | $0 |
| Funding fee (first use, 0% down) | 2.15% |
| Funding fee (disabled veteran) | Waived |
| VA foreclosure rate vs. conventional | 30–50% lower |
| Loan limit (2026, no down payment) | $806,500 |
| Assumable | Yes |
| Benefit reusable after payoff | Yes |
Aaron Eller is the founder of Cash Offer Man, a local cash home buyer in St. Louis City, St. Louis County, and surrounding Missouri communities. Our renovated properties are prepared to VA appraisal standards. For veteran buyers looking for move-in-ready St. Louis homes or for any homeowner ready to sell, visit CashOfferMan.com. Check out our latest article on how to handle a dispute with your property co-owner in St. Louis, Missouri.
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