A VA Loan is a loan option offered through the Veterans Administration. This financing option is available if the borrower is an eligible service member. Veterans must provide a veteran's certificate of eligibility and the appraiser is assigned by the VA.

Features

• Financing for eligible service member (veterans, reservists, active duty personnel, or eligible family members).
• Low to no down payment options available.
• No mortgage insurance requirement.
• Flexible income, debt, and credit requirements.
• Down payment and closing costs may come from a gift or grant.
• Available in a variety of fixed-rate and adjustable rate loan options
• Potential for minimal out-of-pocket expenses with seller contributions.

Considerations

• The borrower typically has to pay a one-time VA funding fee that can be financed into the amount of the loan.
• Financing is available only for primary residences. 

Mortgage Insurance

A contract that insures the lender against loss caused by a mortgagor’s default on a government mortgage or conventional mortgage. Mortgage insurance can be issued by a private company or by a government agency.

Fixed-Rate Mortgage (FRM)

A mortgage interest that are fixed throughout the entire term of the loan.

Adjustable-Rate Mortgage (ARM)

A mortgage with an interest rate that changes during the life of the loan according to movements in an index rate. Sometimes called AMLs (adjustable mortgage loans) or VRMs (variable-rate mortgages).