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By José Omar Rodríguez
Updated: April 6, 2021 12:47 PM ET
house with a military veterans badge on it
Money; Getty Images

A VA mortgage loan is one of the most useful military benefits. This type of loan is easy to qualify for and doesn’t require a down payment or mortgage insurance. However, your FICO score and credit history may affect whether a lender is willing to offer you a loan with zero down payment.

Our guide covers the VA’s specific service requirements and offers a list of the best VA loan lenders of 2021 to give you a good starting point. We also include the types of VA loans and a step-by-step guide to the application process.

Our Top Picks for Best VA Loan Lenders

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Best VA Loan Lenders Reviews

Veterans United Home Loans Review – Best for Loan Variety

Minimum credit score: 640

Minimum down payment: $0 for qualifying borrowers

Veterans United Highlights:

  • Offers fixed and adjustable-rate mortgages, FHA loans, jumbo loans, refinance loans, and cash-out loans
  • Complete your application and prequalification online
  • Works with former senior enlisted military leaders to help educate veterans
  • Lighthouse program offers free credit counseling services for homebuyers
  • Veterans United Realty has over 6,000 real estate agents specialized in VA home purchases

The largest VA lender in the US, Veterans United offers every mortgage loan product available under the VA loan program except home equity loans or HELOCs. We liked the lender’s focus on customer experience, with a robust education section on their website, and user-friendly online approvals.

However, it should be mentioned that Veterans United has slightly higher rates and fees than other lenders on our list, and only offers in-person service in 18 states.

USAA Review – Best for Low Fees

Minimum credit score: 620

Minimum down payment: $0 for qualifying borrowers

USAA Highlights:

  • Offers conventional mortgages, FHA loans, and VA primary, refinance, jumbo, and cash-out loans
  • USAA Real Estate network which connects you with a network of real estate professionals
  • Apply over the phone with a dedicated bank loan officer
  • No underwriting or documentation fees
  • Low minimum credit score
  • Must be a military or military spouse

Where USAA stands out is with their fees, or lack thereof, though they do charge the VA- mandated 1% origination fee on home loans. For their streamlined mortgage refinance loans, USAA pays for the appraisal, title, and VA funding fee, meaning no additional out-of-pocket expenses.

USAA does offer some online capability, allowing customers to determine loan eligibility, upload documents, estimate how much they qualify for and get pre-approved. However, the lender skews towards phone service with a dedicated representative that guides customers through every step of the borrowing process.

Minimum credit score: 640

Minimum down payment: $0 for qualifying borrowers

Navy Federal Credit Union Highlights:

  • Freedom Lock lets you lock in the interest rate on your VA or conventional loan
  • Real Match Guarantee matches any lower rate by another lender, or they’ll deposit $1,000 into your account
  • The RealtyPlus program helps you find a VA real estate specialist and get you between $400 and $8,000 in cash-back
  • Membership limited to current and former military, their spouses, and certain federal employees, contractors, and retirees
  • One of the few VA lenders who also offers home equity loans and HELOCs, they also offer purchase, refinance, jumbo, fixed, adjustable, VA loans

The Navy Federal Credit Union offers two mortgage products designed specifically for members of the military and their families who haven’t met the minimum requirement of a VA loan or are looking to buy a home for the first time.

The Homebuyers Choice Mortgage, a fixed-rate 30-year loan with no mortgage insurance premiums and 100% financing, is tailored specifically to first-time buyers. The Military Choice Mortgage has the same advantages as the Homebuyers Choice, but with added benefits. It offers special pricing on interest rates and origination fees to active-duty borrowers and veterans.

PenFed Credit Union Review – Best for Low Rates

Minimum Credit Score: 620

Minimum down payment: 3% on conventional loans and $0 on VA loans

PenFed Highlights:

  • PenFed charges no lender fees
  • Offers lender credit for purchase mortgages
  • Member deals include discounts for asset protection programs, home security systems, tax preparation services, and car, life, or home insurance
  • Offers 30-and-15-year fixed-rate VA mortgages, and refinancing for existing VA loans
  • Serves members in all 50 states, Puerto Rico, Guam, Germany, Spain, Italy, Okinawa, and the UK

While PenFed has low rates and no lender fees, other fees do apply, including the VA funding fee, title, appraisal, and tax services fees, and more. Since it has an open national membership charter, anybody can apply, so long as they open a savings account.

Aside from its VA loan selections, for those not eligible for VA loans or members of the military looking to purchase a second home, PenFed also offers a number of conventional financing options to choose from.

We especially liked the educational efforts of the PenFed Foundation, a 501 (c)(3) non-profit focused on financial literacy, short-term financial assistance, credit-building, and homeownership. Assistance and resources are accessible to active-duty service members, veterans, and Wounded Warriors.

Veterans First Mortgage Review – Best for Online Loan Accessibility

Minimum credit score: 660

Minimum down payment: $0

Veterans First Mortgage Highlights:

  • Offers low- or no-down-payment mortgages, fixed and adjustable VA loan rates, jumbo loans, and refinancing
  • Applying can be easily done online or over the phone
  • When you apply, you’ll be assigned a dedicated VA loan specialist
  • Specialized in VA loans and military borrowers
  • Licensed in 50 states and Washington, DC

Though Veterans First rates are slightly higher than others on our list, they’re still competitive — and total loan costs tend toward the lower end of the spectrum.

Where this lender really stands out is in its focus on customer service and online loan accessibility. Military customers who might be deployed overseas can take advantage of their online loan application, track and upload documents, and e-sign important papers.

Quicken Loans Review – Best Online Loan Lender

Minimum credit score: 620

Minimum down payment: 3% on conventional loans

Quicken Loans Highlights:

  • Easy online application process through the Rocket Mortgage platform
  • Offers purchase, refinance, jumbo, fixed, adjustable, FHA, and 15-, 25-, or 30-year fixed-rate VA loans for purchase or refi
  • Approves VA loans with one of the highest DTI ratios a lender can require (60%)
  • Can instantly verify employment and income
  • YOURGage mortgage allows customizable fixed-rate loan terms

Quicken Loans is not only the largest mortgage lender in the country, it’s also the second-largest originator of VA loans by volume. While its main focus is on its seamless online experience through Rocket Mortgage, Quicken also has 3,000 mortgage bankers for those who prefer speaking with a person.

Since it’s a non-depository lender, Quicken doesn’t offer home equity loans or home equity lines of credit. Further, though its rates and fees are a bit higher than average, Quicken has been the highest-ranked lender in mortgage origination satisfaction in the J.D. Power U.S. Primary Mortgage Origination Satisfaction Study for eleven years running.

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LendingTree Review – Best for Comparing VA Loan Rates

Minimum credit score: N/A

Minimum down payment: N/A

Lending Tree Highlights:

  • Complete just one form, and receive competing quotes from multiple lenders
  • The platform lets you access many other financial products, even debt relief programs
  • Easy-to-use mobile app
  • Over 1,500 potential lenders
  • 0% down payment options

LendingTree is the nation’s largest online lending marketplace, offering a wide array of VA mortgage options. The biggest advantage LendingTree offers to military borrowers is in how its platform allows for simple comparison of competing quotes. This can especially come in handy with rarer loans, such as ARMs (adjustable-rate mortgages) since using a marketplace can help you consolidate offers.

New American Funding – Best for Low Credit

Minimum credit score: 580

Minimum down payment: 3%

New American Funding Highlights:

  • Offers purchase, refinance, home equity, reverse, jumbo, fixed, adjustable, FHA, and USDA loans
  • Fully online mortgage application, rate quotes, and document tracking
  • Strong branch network and can lend anywhere except New York State and Hawaii
  • Lends to people with “nontraditional credit”
  • Branches in 31 states

New American Funding uses manual underwriting to look at each borrower’s financial situation more comprehensively, lending to borrowers with credit scores as low as 580. This means that NAF considers “nontraditional credit”, evaluating your creditworthiness based on your on-time payments of utility bills and rent, which are not typically included in credit reports.

NAF also offers a 14-day closing guarantee and will often work with down payment assistance programs to help you get the extra funds for your down payment and closing costs. Probably the biggest drawback is that NAF’s lender fees are not especially low.

Freedom Mortgage – Best for VA Streamline Refinancing

Minimum credit score: 580

Minimum down payment: 3%

Freedom Mortgage Highlights:

  • Eagle Eye Program alerts you via text messages if rates drop
  • No private mortgage insurance
  • Benefits for surviving spouses
  • Offers conventional, FHA, USDA, and jumbo loans
  • Both brick-and-mortar branches and online appointments
  • Upload documents, provide an e-signature and track your loan online

Freedom Mortgage offers loans to veterans with lower credit scores when they meet other financial and income criteria. Not only that but if you are looking to reduce your interest rate on your current mortgage, Freedom Mortgage offers the VA Interest Rate Reduction Refinance Loan (IRRRL) program, also called a streamline refinance program.

The benefits of a VA streamline refinance include lower rates, better terms, low funding fees, no income verification, and no home appraisal. How much you can save depends on your current interest rate, the new interest rate, the closing costs, and more. Use Freedom Mortgage’s refinance calculator to estimate your savings.

COVID-19 and VA Mortgage Loans

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) can help VA home loan borrowers who have been economically impacted by the COVID-19 pandemic by allowing for mortgage forbearance, moratoriums on foreclosures and evictions, and credit score protection.

On February 16, 2021, the Biden Administration released a statement providing that HUD, the Department of Veteran Affairs (VA), and the Department of Agriculture (DOA) will coordinate to extend and expand the previously instituted COVID forbearance and foreclosure moratorium.

The actions announced will:

  • Extend the foreclosure moratorium for homeowners through June 30, 2021;
  • Extend the mortgage monthly payments forbearance enrollment window until June 30, 2021, for borrowers who wish to request forbearance;
  • Provide up to six months of additional mortgage payment forbearance, in three-month increments, for borrowers who entered forbearance on or before June 30, 2020.

Requesting a forbearance is as simple as calling your VA mortgage lender and requesting it. There is no documentation required. However, if you can continue to make your loan payments, it is highly recommended that you do so.

If you find yourself in danger of losing your home once the moratorium ends, you should contact the VA for immediate help.

Protection for your Credit Score

The CARES Act provides protection by establishing rules for how VA loan lenders report information to the credit bureaus:

  • If you are up to date on your VA mortgage payments and go into forbearance, your VA mortgage lender is required to report your account as being current. They can mark the account as being in forbearance, which may affect your ability to apply for new credit while in forbearance, but will not negatively affect your credit score.
  • If you were behind in your VA mortgage payments and ask for a forbearance, your VA loan lender is required to maintain that delinquent status until you bring the account up to date. Your score should stay the same as it was before forbearance. However, it will already have been affected, as you were already delinquent in your payments.

VA Loans Guide

How do VA loans work?

The most common VA loans are provided by private lenders but guaranteed by the Federal government; if the borrower were to default on the loan, the government will repay part or all of the loan as part of the guarantee, and provide a number of benefits to qualifying military service members.

Types of VA loans

The U.S. Department of Veterans Affairs offers four different loan types, each with its own set of requirements and limitations. Evaluate all loan options before deciding which best Va mortgage lender suits your needs.

  • Purchase Loan: Purchase loans are designed for the service member who is looking to purchase a primary residence, make energy-efficient upgrades to their home, or buy property to construct a home. With the passage of the Blue Water Vietnam Veterans Act of 2019, the VA itself no longer places a maximum limit on the amount that can be borrowed. However, your VA mortgage lender may place a limit on the amount you can borrow. In most counties in the US, the maximum loan amount is $548,250 for 2021, but it can be as high as $822,375 in more expensive areas. You cannot use a VA mortgage loan to purchase a vacation home, rental property, or a fixer-upper in need of major repairs.
  • Interest Rate Reduction Refinance Loan (IRRRL): The IRRRL, also known as a streamlined refinance loan, can only be obtained to refinance an existing VA mortgage. It can be used to get a lower interest rate, reduce the term of the original loan, or convert an adjustable-rate mortgage (ARM) to a fixed-rate mortgage.
  • Cash-Out Refinance Loan: A cash-out refinance can be used to replace your existing VA loan with one with new terms, in order to take advantage of your home equity. You can also use the cash-out option to refinance a non-VA-backed loan into a VA-backed loan to obtain better terms.
  • Native American Direct Loan (NADL): This is the only loan offered by the VA that is managed and funded directly by the government entity. This loan is available to any veteran who is, or whose spouse is, a Native American, and can be used to buy, build, or improve a home on federal trust land. As of January 1, 2020, there was no limit to the amount of money that could be borrowed (aside from the limits imposed by creditworthiness and DTI) with this program.

What are the costs associated with VA loans?

While VA loans don’t require a down payment or PMI, it doesn’t mean there aren’t other out-of-pocket costs. VA mortgages do come with an upfront mortgage insurance provision, known as the VA Funding Fee. The fee can range from a low of 0.5% to 3.60% of the loan, is added to the mortgage amount, and can be either financed over the term of the loan or paid upfront at closing.

In some cases, such as veterans on a service-related disability, or active-duty service members with proof of being a recipient of a Purple Heart at closing time, the funding fees may be waived.

Other closing costs associated with VA loans include:

  • Real estate commissions
  • Brokerage fees
  • Loan origination fees
  • Discount points
  • Appraisals
  • Title fees

Under VA mortgage lending rules, a property seller can pay up to 4% of the total loan amount toward the veteran’s closing costs (these are known as “seller’s concessions”). The veteran can also cover the closing costs through a gift from a family member.

How do you choose the right VA loan?

Eligibility

The VA home loan program is a great way for active-duty military members, veterans, past and present members of the National Guard, and the surviving spouses of military personnel who died in combat to use their military benefits.

While a VA home loan does not have a credit score minimum, most participating VA loan lenders do require a minimum credit score of 620. Our advice? Always check your score before applying for a loan, and take steps to improve that score if you can.

There are service requirements, however:

  • Veterans and active-duty service members need to have served at least 90 days during wartime, or 181 days during peacetime.
  • National Guard members must have served at least 90 days of active-duty service during wartime or six years of creditable service in the Select Reserves or Guard.

Once you have been deemed eligible, you must apply for a Certificate of Eligibility (COE), which serves as proof to the VA mortgage lender that you meet the VA’s eligibility requirements.

The most common VA home loans are provided by private lenders but guaranteed by the Federal government; if the borrower were to default on the loan, the government will repay part or all of the loan as part of the guarantee and provide several benefits to qualifying military service members.

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Advantages of VA Loans

  • Interest rates and credit score requirements are lower than for conventional loans
  • You may be approved with more debt
  • No down payment, meaning fewer out-of-pocket costs
  • No need for private mortgage insurance (PMI) or mortgage insurance premium (MIP)
  • More lenient refinance options than conventional loans
  • Access to more mortgage relief options, such as mortgage modifications or a forbearance period

Disadvantages of VA Loans

  • Lenders may have additional requirements for homebuyers since the VA only covers 25% of the loan
  • Closing costs aren’t covered
  • The VA funding fee is non-negotiable and can range between 1.25% to more than 3%
  • Factoring in the funding fee may mean that your loan exceeds the market value of the home
  • VA loans cannot be used for rental properties
  • The home must pass VA safety requirements, which may include inspections for termites, water quality, and more

How to apply for a VA Loan?

Once you have deemed eligible for a VA loan there are certain steps you need to take before starting your application:

  1. Gather the information you need to apply for your Certificate of Eligibility (COE). You can apply online, through your lender using a Wen LGY system, or by mail by downloading a VA Form 26-1880.
  2. The next step will depend on the type of loan you’re looking to get — and on your lender. The lender will request a VA appraisal of the house. The lender reviews the appraisal and your credit income and decides if they accept your loan application.
  3. If they decide to accept your application, the lender will work with you to select a title company (or entity) to close on the house.

If you have any questions that your lender can’t answer, please call your VA regional loan center at 877-827-3702. You can also watch a video about VA home loans and how to apply.

Best VA Loan Lenders FAQs

What is a VA loan?

A VA loan is a no-down-payment mortgage military benefit partially backed by the Department of Veterans Affairs (VA). Borrowers can use the loans for the purchase of a primary residence or to refinance an existing mortgage.

How to apply for a VA loan?

To get a VA loan, borrowers must meet the basic requirements outlined above.

How to qualify for a VA loan?

To qualify for a VA loan, you or your spouse must meet the basic service requirements set by the Department of Veterans Affairs (VA), have a valid Certificate of Eligibility, and meet the lender’s income and credit requirements, including a low debt-to-income ratio.

How many times can you use a VA loan?

So long as you meet the availability requirements, VA loans are a military benefit that can be used more than once to purchase or refinance a principal residence. However, you may be able to use a partial entitlement for a second loan, if you haven't used it all on your first mortgage. Bear in mind that using a partial entitlement may mean you'll need to shell out a down payment, and a higher VA funding fee.

How long do you have to live in a house with a VA loan?

The veteran must either personally live in the property or intend to personally move into the property within a reasonable time. Homebuyers have 60 days, which the VA considers a “reasonable time”, to occupy the home after the loan closing.

Do sellers prefer VA loans?

There used to be some resistance from sellers regarding VA loans. However, many of the reasons given — slow-closing times, and sellers having to pay all closing costs — are no longer true. While it is true that the conditions of VA loans mean that homebuyers cannot be required to pay closing costs, these are often wrapped into the lender's origination fee. Further, the VA does allow borrowers to pay up to 4% in buyer's costs if they so choose.

How We Chose the Best VA Mortgage Lenders

Experienced in VA Loans

We prioritized VA mortgage lenders that process many VA loans. The home buying and mortgage application processes can be complicated. Having a VA mortgage lender who is familiar with this process ensures that all the steps required are taken care of in a timely manner.

Customer Service

We also prioritized VA mortgage lenders that excel in customer satisfaction and provide first-time homebuyers or homeowners step-by-step guidance throughout the pre-approval, application, and loan closing process.

Summary of Money’s Best VA Home Loan Lenders of 2021

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