If you are a first-time home buyer and qualify for a VA home loan, did you know you can purchase a home with zero money down? If that is not enough of a wow factor, then what if we said that you also don’t have to pay for private mortgage insurance (PMI), and VA loans come with lower closing costs and interest rates compared to conventional loans.
If we had you at zero money down, then this guide is for you. We will explain why VA loans are best for first-time homebuyers like you, VA loan requirements, a step-by-step process to buying a home with a VA loan, and how to avoid common mistakes first-time home buyers make when applying for a VA home loan.
Before we go any further, let’s clear one thing up. A VA home loan is a federal program available nationwide, and not a program specific to the Commonwealth of Virginia. Loans are provided by private lenders, and the VA guarantees a portion of the loan, allowing lenders to provide you with more favorable terms.
Why VA Is the Best First-Time-Buyer Loan
The easy answer is— it saves you lots of money! First, as a first-time home buyer, you can get into a home with zero money down. This advantage eliminates the need for private mortgage insurance (PMI). More savings come with competitively low interest rates and limited closing costs. Finally, since the VA home loan is a lifetime benefit, you can use your eligibility multiple times.
Dollar savings vs FHA/Conventional on $350K purchase
A VA loan on a $350,000 home will save you a great deal of money compared to Federal Housing Administration (FHA) or conventional loans. How much can you save? Based on the interest rate you get from your lender, you could save between $37,000 to $109,000 on a 30-year mortgage (see our comparison chart below). The savings come from your zero-down payment benefit, not having to pay for PMI, and the lower rates that come with a VA loan.
VA vs FHA vs Conventional comparison table
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Feature |
VA Loan 5.26%* |
FHA Loan 6.07%* |
Conventional 6.30%* |
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Minimum Down Payment |
$0 (for qualified buyers) |
$12,250 3.5% (580+ credit score) |
$17,500 3% (First-time buyers) |
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*Interest rates pulled from Bankrate on April 19, 2026
Am I Considered a “First-Time Buyer” With the VA?
The easy answer is that if you have never used your VA loan benefit before, you are considered a first-time buyer in the eyes of the VA. To confirm your entitlement status, request your Certificate of Eligibility (COE), and make sure it shows “full entitlement.”
Pro Tip: Just because your COE shows full entitlement, it does not mean you are a first-time buyer. You can restore your benefit to full entitlement in other ways.
First-Use Funding Fee
Unless you meet certain requirements, you will need to pay theVA funding fee. This fee is used to ensure the future availability of VA loans for qualified service members. The fee is based on several factors (first use, amount of down payment) and ranges from 0.5% to 3.3%. First-use borrowers will pay between 1.25% and 2.15%.
First vs Subsequent Use Fee Comparison
After you use your VA loan benefits for the first time, your funding fee will increase if you choose to put down a smaller down payment.
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If your down payment is… |
Your VA funding fee will be… |
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VA Loan Requirements for First-Time Buyers
To get financing for a VA-backed home loan, you have to meet credit, income, and occupancy requirements from both the VA and your lender. This means you have to obtain a valid COE, have a credit score of around 600, proof of stable income, and be the primary occupant of the home that passes a VA appraisal for Minimum Property Requirements (MPRs).
Military Service Eligibility
You must show your lender that you qualify based on your service history and duty status. Here are service eligibility requirements for qualifying active-duty service members, veterans, National Guard and Reserve, and surviving spouses:
Service Member: If you are active duty and served for 90 uninterrupted days, you meet the minimum qualifications.
Veterans: If you are a veteran, the rules are a bit more complex. Your length of service requirements can vary from 90 days to 24 months of consecutive service. How you were discharged is also a key factor. Check the VA’s conditions for eligibility.
National Guard & Reserves: If you served in the National Guard or the Reserves, there are also some complex requirements to get your COE. If you served between August 2, 1990, and the present, you will need a minimum of 90 days of non-training active-duty service, or 6 creditable years of service in the Guard or Selected Reserve to be eligible. Check the VA’s requirements to see if you are eligible.
Surviving Spouses: If you are a surviving spouse, you may also be eligible for a VA COE. If you are currently getting VA Dependency and Indemnity Compensation (DIC) as a result of a deceased service member or the spouse of an active duty service member who is MIA or a POW, you may request a COE.
VA Certificate of Eligibility (COE) — What It Is and How to Get It Fast
A VA Certificate of Eligibility (COE) (VA Form 26-1880) is an official VA document that verifies that a veteran, service member, or eligible surviving spouse qualifies for a VA-backed home loan. Eligibility is based on meeting military service requirements, and lets the lender know that you are eligible for this benefit.
The fastest way to get your COE is either requesting one online through the VA or asking your lender if they have the capability to access your COE online. If the VA has all they need, you can get your COE in seconds.
Credit Score & Income
According to the VA, they do not have a minimum credit score to qualify for a VA loan, but you must meet your lender’s credit and income minimum standards to be approved for a VA loan. Your lender will use your credit history to see how creditworthy you are. Depending on the lender, they may want you to have a minimum credit score of 620 if you use the zero down payment option. A higher credit score can get you better loan terms.
VA Home Buying Process Step-by-Step
Since you are new to the VA home-buying process, it may be easier to grasp the concept if we break it down step-by-step. Basically, there are five initial steps to the VA home buying process. The VA suggests following these steps to ensure you meet lender requirements, maximize your VA benefits, including the zero-down advantage, and find a safe home:
Step 1: Apply for your COE
You will need your COE to show your lender you qualify for the VA home loan benefit. Learn how to get your COE in minutes.
Step 2: Examine your current finances
Review your credit profile and monthly budget to ensure you are ready to buy a home. Decide how much of a mortgage you want, and ensure you include all costs in the total price of the home loan when making calculations.
Step 3: Select a lender
Lenders offer different rates and fees, so shop around for the loan that best meets your needs.
Step 4: Choose a real estate agent
Get recommendations from family, friends, or peers who have recently purchased a VA-backed home. Make sure you understand all documents before you sign with an agent.
Step 5: Search for a home
Look for all the homes that are in your price range, and select the one that best meets your family’s needs, including commute times, real estate taxes, and quality of local schools.
First-Time Buyer Programs to Stack with VA Loan
Did you know that you can combine, or “stack,” payment assistance programs and local grants with your VA zero-down home loan? Many programs, such as the down payment assistance (DPA) programs, target first-time homebuyers. Let’s examine how to stack first-time buyer programs with your VA loan. Many are veteran-focused, and you could qualify for more help than you think.
State Down Payment Assistance (DPA) Programs and Local Grants
According to Down Payment Resource, DBA programs can be stacked with VA loans to provide extra financial help and come in the form of:
- Grants
- Forgivable loans (after you are in your home for a certain time)
- Deferred loans (repay when you sell or refinance)
Use this search tool to find state assistance programs in your area. Each listing will include qualification details such as income, program types, benefits, and whether it is available to veterans or active-duty service members.
Common First-Time Buyer Mistakes with VA Loans
It is common for first-time buyers applying for VA loans to get tripped up by certain aspects of the VA loan process, usually with up-front preparation, such as not getting your COE early in the process, underestimating the total cost of your home purchase, and taking on new debt before closing on your home.
Here are some of the most common mistakes that first-time VA loan home buyers make and how you can avoid them.
Mistake 1: Not Getting Your COE First
Your lender needs proof that you are eligible before they can process your loan. The good news is that your lender can obtain your COE in minutes, or you can request a COE online through the VA, preventing major delays.
Mistake 2: Confusing Pre-Qualification with Pre-Approval
Pre-qualification and pre-approval are two terms that are very different, and skipping a full pre-approval is a common mistake.
- Pre-qualification is a rough estimate of how much you might be able to borrow, and a good starting point, but it carries little weight with sellers.
- Pre-approval is when your lender examines your full financial picture to determine how much they are willing to lend you.
A pre-approval letter shows sellers you are a serious, financially vetted buyer.
Mistake 3: Not Understanding the VA Funding Fee
The VA funding fee is a one-time fee that helps fund the loan program for future applicants. The fee amount is a percentage of the loan and varies depending on your specific situation. For most first-time buyers with no down payment, the funding fee is 2.15% of the loan amount.
Mistake 4: Underestimating Total Homebuying Costs
While you are allowed to get the loan with zero down, it doesn’t mean there are no additional closing costs, such as the VA appraisal, title insurance, and realtor/lender fees.
According to the VA, you can actually negotiate some of the closing costs. For example, the VA allows for seller concessions, up to a maximum of 4% of the home’s value.
Mistake 5: Misunderstanding Minimum Property Requirements (MPRs)
A VA-certified inspector must verify that your home meets Minimum Property Requirements (MPRs) before the loan can close. Understanding MPRs will help you avoid making an offer on a home that won’t qualify for VA financing without significant work.
Mistake 6: Waiving the Home Inspection
Remember that the VA appraisal is not a home inspection. An appraisal determines your home’s fair market value and ensures it meets MPRs. A home inspection tells you the true condition of the home. Skipping an inspection can lead to thousands of dollars in unforeseen repairs after you move in.
Mistake 7: Taking on New Debt Before Closing
Your pre-approval is based on your credit picture at that moment. Using credit for major purchases on credit before your loan closes is one of the biggest mistakes a first-time buyer can make, and could lead to a last-minute loan denial.
Take the Next Step
If you’re ready to move forward or just want more information, the first step is to check out the VA loan process.
FAQ
Q: Is VA only for first-time buyers?
No, VA loans are not only for first-time homebuyers. In fact, about 25% of eligible member didn’t use a VA loan for their mortgage.
Q: Can I use a VA loan twice?
Of course! If you meet eligibility requirements, there are no limits on how many times you can restore your VA eligibility.
Q: Do I need 20% down?
No. That is one of the great advantages of a VA loan. The 20% down threshold is not required, and you can get into a home with zero down.
Q: What credit score do I need?
According to the VA, they do not have a minimum credit score to qualify for a VA loan, but your lenders will use your credit history to see how creditworthy you are. A higher credit score can get you better loan terms. Depending on the lender, they want you to have a minimum credit score of 620 if you use the zero down payment option. A higher credit score can get you better loan terms.
