Conventional 30-year mortgage rates have hovered in the mid-6% range for months, and a 20% down payment on the typical American home now runs well over $80,000 in many markets.
For veterans, active-duty service members, and some surviving spouses, there's a workaround that most eligible households still don't fully use: the VA home loan.
Roughly 1.5 million VA loans are guaranteed each year, yet surveys consistently show that a large share of veterans never explore the benefit—often because they assume it's complicated, slow, or limited to first-time buyers.
None of that is accurate. **No down payment, no monthly mortgage insurance.** That's the headline feature.
Conventional buyers who put down less than 20% typically pay private mortgage insurance, which can add hundreds of dollars to a monthly payment.
On a $400,000 home, the difference can easily exceed $200 a month—money that goes toward principal instead of a lender's risk cushion. **The funding fee is the catch nobody mentions.** Most VA buyers pay a one-time fee of 2.15% to 3.3% of the loan amount, depending on down payment and whether it's a first or subsequent use.
On a $400,000 loan with nothing down, that's roughly $8,600—often rolled into the loan balance.
Veterans with a service-connected disability rating of 10% or higher are exempt, as are surviving spouses receiving Dependency and Indemnity Compensation.
It's worth checking your exemption status before you shop. **Rates aren't automatically the lowest.** VA rates track close to conventional rates but vary by lender, and some lenders pad VA loans with higher fees because they know buyers are comparing fewer offers.
Getting quotes from at least three VA-approved lenders remains the single biggest lever on cost. **The rules are looser on credit, tighter on the property.** The VA doesn't set a minimum credit score—lenders typically do, often around 580 to 620.
But the home itself must pass a VA appraisal focused on safety and livability, which can kill deals on fixer-uppers with peeling paint, exposed wiring, or roof damage.
Sellers sometimes balk at VA offers for this reason, though that resistance has softened as the program's reputation has improved. **You can reuse the benefit, and it's not one-and-done.** Eligible borrowers can use a VA loan more than once, and in some cases carry two VA loans at the same time—useful for military families who relocate without selling.
Restoring entitlement after paying off a loan is a common step that many buyers overlook. **Assumable loans are the sleeper advantage.** VA mortgages are assumable, meaning a buyer can potentially take over the seller's existing loan—including its interest rate.
In a market where rates remain elevated, inheriting a 3% VA loan is a genuinely scarce asset.
The catch: the assuming buyer must qualify and typically must have VA entitlement or be a veteran, which narrows the pool but can still be a powerful negotiating chip for sellers.
For anyone with the entitlement, the practical move is simple: get a Certificate of Eligibility, gather three lender quotes, and compare the total cost—rate, funding fee, and closing costs—rather than the rate alone. **Our take:** The VA loan isn't a magic wand, and the funding fee plus property standards mean it won't fit every purchase.
But for eligible buyers who plan to stay put for a few years, it remains one of the few paths to homeownership that doesn't require a six-figure down payment or a monthly insurance surcharge.
Final Thoughts
In a market this expensive, leaving that on the table is the real risk.