Short answerA VA loan lets eligible veterans and service members buy with no down payment and no monthly mortgage insurance, in exchange for a one time funding fee and a VA appraisal that checks minimum property requirements. You compete with conventional offers by showing the seller a strong approval, a clean timeline, and that the house will clear the appraisal.
How does a VA loan work?
- No down payment for borrowers with full entitlement, subject to the lender's approval.
- No monthly mortgage insurance.
- A one time funding fee. For a first time VA purchase with no down payment, it is 2.15% of the loan amount; for later use with no down payment, 3.3%. It can be financed into the loan. Veterans who receive VA compensation for a service connected disability are generally exempt. Confirm your status with VA and your lender.
- Limits on some fees. VA restricts certain fees a veteran can be charged, which is why the seller sometimes pays items a conventional buyer would pay.
- Seller help. A seller can pay your normal closing costs. Separate seller concessions, such as paying your funding fee or prepaid items, are capped at 4% of the VA's reasonable value.
What does the VA appraisal check?
Value, plus VA's Minimum Property Requirements: the house must be safe, structurally sound, and sanitary. Common flags are peeling paint, missing handrails, roofs with little life left, electrical hazards, and well or septic concerns. VA updated these rules in 2026 for appraisals ordered after May 1, 2026. VA Minimum Property Requirements and what FHA, VA, and USDA appraisers flag.
If the appraiser expects the value to come in below the contract price, VA's process usually gives your agent a short window to send additional comparable sales before the value is final. Ask your lender how that works on your loan.
Why are some sellers nervous about VA offers?
Usually because of stories about appraisal repairs and delays. Some of those concerns are about the house, not the loan. A house with peeling paint or no handrails will hit the same flags on an FHA or USDA loan. Your job is to make the seller comfortable that your deal will close.
How do I compete with conventional offers?
- Get fully underwritten approval, not just a prequalification, and have your lender ready to take a call from the listing agent.
- Look at the house through the appraiser's eyes before you offer. If it is close to ready, say so in your offer.
- Be clear about repairs. Offer to handle small required repairs yourself where the lender and seller allow, or agree up front on how they will be handled.
- Keep the ask simple. Asking for the seller to pay all closing costs, a big repair list, and a long close in the same offer is hard to accept against a clean conventional offer.
- Bring a reasonable earnest money deposit and a closing date that works for the seller.
- Price it right. An offer well above recent sales invites an appraisal problem. How to decide what to offer.
What does a VA loan cost per month?
On a $220,000 house with no down payment and a first use funding fee financed, at a 7.18% example rate, principal and interest is about $1,522 a month. Add property tax, insurance, utilities, and upkeep. See the full breakdown and run your own numbers: what a house really costs per month.
What should I do first?
- Get your Certificate of Eligibility through your lender or VA.
- Get preapproved with a lender who closes VA loans regularly.
- Decide on your monthly budget, not just your approval amount.
- Have every listing you like reviewed for likely appraisal flags before you offer.
I am a U.S. Coast Guard veteran, and I like helping veterans and service members buy well. If you are not already working with an agent, the Before You Offer review below is a good place to start.
What John sees in the field
The VA offers that win are the ones where the seller can see the house will pass. I walk the listing with the appraiser's checklist in mind before we write anything.
Small required repairs, like scraping and painting a few windows on a 1970s house, rarely kill a VA deal. Surprises at the end do.
Frequently asked questions
Do I need a down payment with a VA loan?
Not if you have full entitlement and qualify with your lender. Some buyers still put money down to lower the funding fee or the payment.
What is the VA funding fee?
A one time fee paid to VA. For a first use purchase with no down payment it is 2.15% of the loan; for later use with no down payment it is 3.3%. Many veterans with service connected disability compensation are exempt.
Can the seller pay my closing costs on a VA loan?
Yes. A seller can pay your normal closing costs. Separate concessions, such as paying your funding fee, are capped at 4% of the VA's reasonable value.
Does a VA appraisal take longer?
It can, depending on appraiser availability. Ask your lender for current timing and build it into your closing date.
Can I use a VA loan on a house with a well and septic?
Often yes. The lender may require water testing and a septic evaluation. Ask early.
Keep reading
Looking at a house and not sure what you are getting into?
Ask for a free Before You Offer review. Send me the listing. I look over the photos, the seller's disclosure, and recent sales, then flag likely condition issues and planning cost ranges before you write an offer.
Request a Before You Offer reviewOr call or text (812) 525-5489, or email john@yourpropertynegotiator.com.
The Before You Offer review is a REALTOR® and contractor review of the listing, not a home inspection. It is for buyers who are not already working with an agent. If you have an agent, please bring these questions to your agent.
Sources
- VA funding fee and closing costs, VA.gov; VA Pamphlet 26 7, Chapter 8 (fees and the 4% concession limit)
- VA Pamphlet 26 7, Chapter 12, Minimum Property Requirements, and Change 46 (2026)
- Freddie Mac Primary Mortgage Market Survey, 30 year fixed average 7.18% for the week of November 5, 2026
Written by John Long, REALTOR®, 1 Percent Lists Indiana Real Estate. Working contractor who has priced hundreds of home inspection repair requests. Former labor relations negotiator for a major manufacturer and U.S. Coast Guard veteran.
John Long, REALTOR® · 1 Percent Lists Indiana Real Estate · (812) 525-5489 · yourpropertynegotiator.com
This page is general information, not a substitute for a professional home inspection, and not legal, tax, insurance, or lending advice. Ask a real estate attorney about contracts and disclosure, a CPA about taxes, your lender about loan rules, and a licensed inspector or tradesperson about your house. Nothing here guarantees a sale price, net proceeds, repair cost, payment, timeline, appraisal, inspection result, or loan approval. Cost figures are planning estimates, not bids. I own Wardmark Property Operations LLC, a contracting company. You are always free to use any contractor you choose.