For millions of veterans and active-duty service members, the VA loan remains one of the last zero-down mortgages standing in a housing market that has otherwise locked out first-time buyers.
No down payment, no private mortgage insurance, and a cap on how much sellers can charge for closing costs.
In a country where the median home price has hovered near $420,000, according to National Association of Realtors data, that combination still carries real weight.
The catch is that "no down payment" no longer means "cheap monthly payment." With the 30-year fixed rate flirting with the mid-6% range for much of 2025, a $400,000 loan with nothing down runs roughly $2,550 a month before taxes and insurance.
Five years ago, that same loan would have cost about $1,700.
The interest rate just swallowed more of the savings.
One fee veterans should know about is the VA funding fee, which ranges from 1.25% to 3.3% of the loan amount depending on your service history and whether it's your first use of the benefit.
On a $400,000 purchase, that can mean $5,000 to $13,200 rolled into the loan.
Borrowers with a service-connected disability rating are exempt, and it's worth checking your Certificate of Eligibility before you assume you owe it, since lenders don't always flag the exemption automatically.
Credit standards have also quietly tightened.
While the VA itself doesn't set a minimum score, most lenders now want at least a 620, and many prefer 640 or higher for competitive pricing.
That's a shift from the looser underwriting of the 2010s.
Veterans with thinner credit files may find themselves shopping harder than they expected.
Where the program still beats conventional loans is in flexibility.
Sellers can contribute up to 4% of the purchase price toward closing costs, and the VA allows the full funding fee to be financed.
There's also no monthly mortgage insurance premium, which on a comparable FHA loan would add hundreds of dollars a year.
Over a five-year stretch, that difference can add up to real money.
For veterans sitting on the sidelines waiting for rates to fall, the trade-off is less obvious than it looks.
Refinancing later is possible through the VA's Interest Rate Reduction Refinance Loan, which typically skips the appraisal and credit underwriting.
Buying now at a higher rate and refinancing later has worked for previous generations, though it depends on rates actually coming down.
The practical move for most veterans is to get pre-approved through at least two VA-friendly lenders and compare the total monthly cost, not just the rate.
Fees, points, and how the funding fee is handled can swing the real cost by thousands.
The VA loan isn't the steal it was when rates sat under 3%, but it's still one of the strongest tools veterans have.
Skipping a 20% down payment on a $400,000 home keeps $80,000 in your pocket, and that flexibility matters more than a headline rate.
Final Thoughts
Just run the numbers on the full monthly payment before you fall in love with a listing.