
VA Purchase Loans
Who is eligible for a VA Purchase Loan?
- Qualify for a Certificate of Eligibility (COE)
- Meet the VA's and the lender's standards for credit, income, and any other requirements, and
- Will live in the home they are buying with the loan
What are the benefits for a VA Purchase Loan?
No down payment | If the sales price is not higher than the home’s appraised value, there may be no need to place a down payment. | ||||||||||
Better terms and interest rates | When compared to other loans from private banks, mortgage companies, or credit unions. | ||||||||||
The ability to borrow up to the conforming loan limit | The Federal Housing Financing Agency (FHFA) establishes baseline conforming loan limits for mortgages. Under a VA Purchase Loan, service members may borrow up to the limit without making a down payment. If they make a down payment, they may be able to borrow more than this amount. Click here to Learn about VA Home Loan limits | ||||||||||
No need for Private Mortgage Insurance (PMI) or Mortgage Insurance Premiums (MIP) | VA Purchase Loans do not require PMI or MIP. These two are a type of insurance that protects the lender if the borrower does not pay their mortgage. It is required on conventional loans if there is a down payment of less than 20% of the total mortgage amount. | ||||||||||
Fewer closing costs | VA Purchase Loans have fewer closing costs which may even be paid by the seller. | ||||||||||
No prepayment fees | Unlike other loans there is no penalty for borrowers paying the loan off early. |
What can I use a VA Purchase Loan for?

- Build a new home
- Adding new features to a newly purchased home to make it more energy efficient
- A single-family home for up to 4 units
- A VA approved condo
- A manufactured home
How can I use a VA Purchase Loan to build a new home?

The lender is responsible for all aspects of project management and may set limitations.
Can I use a VA Purchase Loan to buy or build a farm house?

How can I use a VA Purchase Loan to make alterations or repairs to my home?

Examples of common improvements include
- roof
- foundation
- floors
- plumbing
- electrical
- HVAC systems
While there is no requirement for the service member to put any money down for the additional alteration or repair loan by the VA, some lenders might request the service member to pay 15% down.
Service members may also choose the builder or contractor for the project, but to do so they must be registered with the VA or obtain VA builder identification number. The lender might also have additional requirements for the builder or contractor.
How can I use a VA Purchase Loan to make my house energy efficient?
When applying for a VA Purchase Loan, service members have the option to get an Energy Efficient Mortgage (EEM). This option may only be used before closing on a VA Purchase Loan. EEMs loans cover the cost of making energy efficiency improvements to a home. Up to $6,000 of improvements may be included in a Purchase Loan.

Examples of energy efficiency improvements include
- Solar heating and cooling systems,
- Caulking and weather stripping,
- Furnace efficiency modifications,
- Clock thermostats,
- New or more insulation,
- Storm windows/doors,
- Heat pumps,
- and Other energy improvements may also be considered.
Are there any fees I must pay with my loan?
Service members that are eligible for a Purchase Loan may have to pay a VA funding fee. This is a one-time fee that supports the program. Some service members or their spouses might be able to get this fee waived. The lender will also charge interest on the loan in addition to closing fees.
Where can I learn more about VA Home Loans?
The VA’s Home Loan page has dedicated information, resources, and guidance for how to get and use a VA Home Loan.
More in-depth details and information can be found in the VA Home Loan Guaranty Buyer’s Guide.