Elisha Lynch | Worcester Real Estate, Holden Real Estate, Shrewsbury Real Estate


Securing a mortgage can take years of planning and saving. Depending on credit score and financial history, it can be difficult for some people to secure a mortgage with a reasonable interest rate and down payment.

As a result, the U.S. government--at both the federal and state level--has created several programs to make the goal of homeownership more achievable for more Americans. 

These programs are designed to help a number of people, including first-time homebuyers, low-income families, people living in rural areas, Native Americans, and veterans and servicemembers of the United States military.

In today’s article, we’re going to be talking about “VA loans,” or loans guaranteed by the United States Department f Veterans Affairs.

What is a VA Loan?

When a bank chooses to approve someone for a mortgage, they have weighed the risks of that person’s ability to pay back the loan. The less certain a bank is that they will see a return on their investment with a borrower, the higher the down payment and interest rate they will require.

One incentive that the U.S. Department of Veteran Affairs offers its service members and veterans is the ability to receive a loan that is, in part, guaranteed by U.S. Government. That means that lenders can safely approve you for lower interest rates and down payments knowing that the money they are lending you is insured.

Who is eligible for a loan?

Loans guaranteed by Veterans Affairs aren’t strictly for veterans. Active duty service members, including National Guard and Reserve Members may also be eligible. In addition to service members, people who are or were spouses of veterans or service members might also be eligible for a VA loan.

Specific eligibility requirements can be somewhat complicated, so it’s a good idea to visit the eligibility page or contact your local Veterans Affairs office.

What are the perks of a VA Loan?

If you’ve spent a significant portion of your time serving in the military, there’s a good chance that saving for a home has been placed on the back burner. Shopping around for a loan with an affordable down payment can be daunting or impossible for many.

Fortunately, with a VA loan eligible recipients are able to receive a loan with a low down payment or even no down payment.

In a time when down payments can average 20% of the mortgage, that can mean a lot of money you won’t have to spend up from. For example, a home that costs $275,000 would have a 20% down payment of $55,000.

What are the fees?

This great deal does come with one catch. As with many loan assistance programs, there is a fee charged for the services. On top of the funding fee charged by the VA, there are other costs associated with buying a home.

These may include appraisals, inspections, credit reports, and more. Additionally, lenders may charge a 1% flat fee for those using a VA loan.




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