1. Confirm eligibility (COE)
Your Certificate of Eligibility shows the lender you may use the VA home loan benefit. It is not loan approval. Many lenders can request it electronically for you.
2. Preapproval: income and credit review
The lender reviews income, credit, assets and debts. The VA requires borrowers to meet credit and income standards, but many specific underwriting requirements, such as minimum credit scores, are set by the lender rather than the VA.
3. Choose an eligible property
According to the VA, purchase loans may be used for single-family homes, properties up to four units, VA-approved condos, manufactured homes in eligible circumstances, and certain new construction or improvements. Each property still has to meet VA requirements, so check early, especially with condos.
4. Make an offer
A preapproval letter and a realistic budget help your offer. Seller credits toward closing costs can be negotiated but are never automatic. See the seller credits guide for VA limits.
5. VA appraisal
The VA appraisal estimates the home's reasonable value and checks minimum property requirements. It is not a home inspection, which you may still want separately.
6. Funding fee and closing
Most borrowers pay a one-time VA funding fee, which can often be financed into the loan. Some borrowers are exempt. Current rates are published by the VA. You'll also have closing costs, which vary by lender and transaction.
Occupancy and reusing your benefit
VA purchase loans are for a home you intend to live in as your primary residence. Many borrowers can use the benefit more than once; how much entitlement is available depends on prior use.
California considerations
California home prices and HOA dues vary widely by county. Many Southern California condos are in HOA communities, so confirm VA condo approval status early, and budget for property tax and any HOA or Mello-Roos assessments.
What Eileen can help with
- Requesting your COE
- Reviewing your budget and estimated payment
- Explaining property eligibility before you write an offer
- Coordinating with your real estate agent through closing
Frequently asked questions
- Do I need a down payment?
- Not always. Eligible borrowers with sufficient entitlement may be able to purchase with no down payment, subject to lender approval and appraisal. A down payment may be needed in some situations, such as limited remaining entitlement.
- Is there a VA loan limit?
- Borrowers with full entitlement generally aren't subject to a VA loan limit, but that doesn't mean unlimited borrowing. Income, credit, debts and the appraisal still determine what a lender will approve.