VA Loan Benefits 2026: Complete Guide to $0 Down, No PMI & Low Rates
VA loans are the most powerful mortgage benefit in America. $0 down payment, no PMI ever, lowest rates (6.25% avg Feb 2026), and no loan limits. If you're eligible, there's no reason to use any other loan type. Here's everything you need to know.
VA Loan vs. Every Other Loan Type: The Numbers
| Feature | VA Loan | Conventional | FHA | USDA |
|---|---|---|---|---|
| Down Payment | $0 (0%) | 3-20% | 3.5% | $0 (0%) |
| Mortgage Insurance | NONE (ever) | PMI until 80% LTV | MIP for life | 0.35% annual |
| Interest Rate (Feb 2026) | 5.65% | 6.10% | 5.85% | 5.75% |
| Min Credit Score | 580 (most lenders 620) | 620 | 580 | 640 |
| Loan Limits | No limit (full entitlement) | $806,500 | $498,257 | Varies by area |
| Closing Costs | Seller can pay 100% | Seller pays up to 3-6% | Seller pays up to 6% | Seller pays up to 6% |
| Property Types | Primary residence only | All types | Primary only | Rural primary only |
| Prepayment Penalty | None | None | None | None |
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How Much a VA Loan Saves You: Real Numbers
Scenario: $400,000 home purchase, 30-year fixed mortgage.
| Cost | VA Loan | Conventional (5% down) | FHA (3.5% down) | VA Savings |
|---|---|---|---|---|
| Down payment | $0 | $20,000 | $14,000 | $14K-$20K |
| Upfront fees | $8,600 (funding fee)* | $0 | $6,755 (MIP) | — |
| Monthly payment (P&I) | $2,363 | $2,307 | $2,337 | — |
| Monthly MI/PMI | $0 | $190 | $177 (forever) | $177-$190/mo |
| Total monthly | $2,363 | $2,497 | $2,514 | $134-$151/mo |
| Total cost (30 years) | $859,280 | $918,920 | $971,040 | $59K-$112K saved |
*VA funding fee (2.15% first use) can be financed into the loan. Exempt if you have a service-connected disability (10%+).
Who Is Eligible for a VA Loan?
Service Requirements
How to Get Your COE
You need a Certificate of Eligibility (COE) to prove VA loan eligibility. 3 ways to get it:
- Online: eBenefits portal (instant for many veterans)
- Through your lender: Most VA-approved lenders can pull it electronically in minutes
- By mail: VA Form 26-1880 (takes 4-6 weeks)
Most lenders can pull your COE instantly — you don't need to do it yourself.
VA Funding Fee 2026: Complete Breakdown
| Situation | Down Payment | First Use | Subsequent Use |
|---|---|---|---|
| Purchase/Construction | 0% down | 2.15% | 3.30% |
| Purchase/Construction | 5-9.99% down | 1.50% | 1.50% |
| Purchase/Construction | 10%+ down | 1.25% | 1.25% |
| Cash-Out Refinance | N/A | 2.15% | 3.30% |
| IRRRL (Streamline Refi) | N/A | 0.50% | |
| Disability Exempt (10%+) | Any | $0 (EXEMPT) | |
Funding fee exemptions: Veterans with 10%+ service-connected disability, Purple Heart recipients (active duty), and surviving spouses pay $0 funding fee. This saves $8,600 on a $400K loan. If you have a pending disability claim, apply now — if approved, you get a refund.
7 VA Loan Myths Busted
MYTH: "Sellers don't like VA offers."
FACT: VA loans close at the same rate as conventional (74% vs. 75%). The VA appraisal protects YOU from overpaying. Smart sellers know VA buyers are reliable — they've been vetted by the VA.
MYTH: "VA loans take forever to close."
FACT: Average VA loan closes in 30-35 days — same as conventional. Some lenders close VA loans in 21 days. The VA appraisal adds 0-5 days vs. conventional.
MYTH: "You can only use a VA loan once."
FACT: You can use your VA loan benefit as many times as you want. Pay off one VA loan, get another. You can even have two VA loans at the same time with remaining entitlement.
MYTH: "VA loans have a maximum loan amount."
FACT: Since 2020, there are NO loan limits for veterans with full entitlement. You can buy a $1M+ home with $0 down if you qualify based on income.
MYTH: "VA loans are only for first-time buyers."
FACT: No first-time buyer requirement. Use it for your 1st home, 5th home, or 10th home. Also works for refinancing (IRRRL or cash-out).
MYTH: "The property must be in perfect condition."
FACT: VA Minimum Property Requirements (MPRs) are reasonable safety standards — working utilities, no major structural issues, safe roofing. Most move-in ready homes pass easily.
MYTH: "VA loans have higher rates."
FACT: VA loans consistently have the LOWEST rates of any loan type. Feb 2026 avg: 5.65% VA vs. 6.10% conventional vs. 5.85% FHA. The VA guaranty reduces lender risk, which means lower rates for you.
VA IRRRL (Streamline Refinance): The Easiest Refi in America
IRRRL Benefits
- ✓ No appraisal required
- ✓ No income verification
- ✓ No credit underwriting (most lenders)
- ✓ Can close in 15-21 days
- ✓ Funding fee only 0.50%
- ✓ Can be done with no out-of-pocket costs
IRRRL Requirements
- • Must currently have a VA loan
- • Must lower your rate OR switch from ARM to fixed
- • Must have made 6+ payments on current VA loan
- • Must be current on payments (no 30-day lates in last 12 months)
- • Net tangible benefit required
Example: Current VA loan at 7.00%. IRRRL to 5.65%. On $350K loan: save $320/month = $3,840/year. Funding fee: $1,750. Break even: 5.5 months. No-brainer.
VA Loan Process: 7 Steps to Closing
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Related Resources
Editorial Note: VA loan data from Department of Veterans Affairs Lender Handbook (VA Pamphlet 26-7). Funding fee schedule from VA Circular 26-23-06. Rate data from Freddie Mac PMMS and VA lender surveys. Updated Feb 13, 2026. Editorial standards.