10 Best VA Loan Lenders of April 2023

Our Partners

Our Partner

Visit Site

• Provides extensive customer service hours

• The minimum credit score required is 620

• Loan terms: 15, 20, 25, and 30 years

• Minimum down payment required: 0%

Our Partner

Visit Site

• $0 down VA loan options

• 100+ years serving military members

• USAA Bank (NMLS ID 401058) is an Equal Housing Lender

• Membership not required for a loan inquiry, but is for a preapproval or application

Our Partner

Visit Site

• Discloses the latest rates online with daily updates

• The minimum credit score required is 580

• Loan terms: 30 years

• Minimum down payment required: 3%

Our Partner

Visit Site

• 24/7 security monitoring

• Equal Housing Opportunity Lender

• Approval for home purchasing or mortgage refinancing in minutes

• Adjust your down payment to find a solution suitable for your needs

Our Partner

Visit Site

• A+ rating with the Better Business Bureau

• 30-, 20- & 15-year fixed-rate and 5-year ARM loans

• FDIC Insured bank since 1919 with 100 years of experience

• Refinance up to 100% of your primary home’s value with no down payment

Our Partner

Visit Site

• Easier qualification compared to conventional loans

• Rates as low as 2.750% APR

• Quick, easy application process

• Get the best rates by letting banks compete for your business

• Calculate what you can afford with VA Loan Calculator

• Free personalized mortgage rates in minutes

A VA loan is a military benefit that doesn’t require a down payment or private mortgage insurance (PMI). They also typically carry lower interest rates than conventional home loans. However, there are specific requirements to qualify for a VA loan. Additionally, your credit score and credit history may still affect your interest rate as well as whether a lender is willing to offer you a loan with zero down payment.

We’ve researched and categorized the best VA loan lenders of 2023. Whether you’re looking for low rates, a fully online mortgage experience or lenders that work with lower credit scores, we’ve chosen VA home loan options that fit the needs of a variety of borrowers.

Our Top Picks for Best VA Loan Lenders

• Navy Federal: Best Overall

• Rocket Mortgage: Best Online Loan Lender

• Veterans United: Best for Loan Variety

• PenFed: Best for Competitive Rates

• NASB: Runner-Up for Best for Competitive Rates

• USAA: Best for All-in-One Home Services

• LendingTree: Best for Comparing VA Loan Rates

• Freedom Mortgage: Best for Low Credit Scores

• New American Funding: Best for Low Credit Scores Runner-Up

• Fairway Independent Mortgage: Best for In-Person Service

Best VA Loan Lenders Reviews

Pros

• Lowest fees on our list

• Non-VA mortgage options that require no down payment

• 356 branches worldwide

• No lender fees

Cons

• Small number of branches within the U.S.

• Membership strictly limited to military members, spouses, family members, veterans and the Department of Defense

• Customized rates only offered to members

Why we chose it: A combination of low fees, several loan assistance programs and a wide selection of mortgage loans make Navy Federal Credit Union our best VA loan lender overall.

Navy Federal Credit Union is a financial institution that offers low rates and financial incentives to military families.

Navy Federal’s standout feature are its low interest rates: For a $300,000 mortgage with 0.750 discount points purchased, a 15-year term starts at 5.5% and a 30-year term could be as low as 5.625%. Its mortgage loan offering is also notable for having “zero down payment” loans for those who may not qualify for a VA loan.

Additionally, Navy Federal’s financial incentives include up to $9,000 cash back for using its network of real estate agents and allowing the seller to contribute up to 4% of the home’s cost towards your closing fees. Navy Federal also has a rate lock feature that allows you to lock in a lower rate up to two times while you shop for a home.

HIGHLIGHTS

Minimum Credit Score

Unstated, VA recommendation of 620 is suggested

Minimum Down Payment

$0 for qualifying borrowers

Mobile App

Yes

NMLS ID

399807

Pros

• Access to your loan information is available 24/7 with the proprietary mobile app

• Credit scores as low as 580 accepted

• Debt-to-income ratios as high as 60% accepted

Cons

• No HELOCs offered

• No USDA loans offered

• No physical locations for in-person service

Why we chose it: Rocket Mortgage’s fully online application and closing process, along with its multiple tools for keeping track of your in-process and existing loans make it our pick for best online VA loan lender.

Rocket Mortgage is an online lender that stands out for its relatively seamless online mortgage application process. While the experience may vary depending on each borrower’s situation, Rocket Mortgage’s website and mobile app allow you to submit all of your paperwork digitally and track every step of your loan’s processing.

While you have the option of speaking with a live representative, you can also communicate with Rocket Mortgage through online or mobile messaging.

Although Rocket Mortgage doesn’t have the broadest loan offering, it does work with all the major VA loans (purchase, refinance, IRRRL) and considers credit scores as low as 580 and debt-to-income ratios as high as 60%.

HIGHLIGHTS

Minimum Credit Score

580

Minimum Down Payment

0% for qualifying borrowers

Mobile App

Yes

NMLS ID

3030

Pros

• Broader selection of veteran-focused loans than competitors

• Offers real estate services for veterans

• Customer support is available 24/7

Cons

• No HELOC products offered

• Only 26 affiliate branches across 17 states

Why we chose it: Veterans United offers more veteran-focused mortgage options than the standard purchase, refinance and streamline products, making it our choice for best VA loan lender for VA loan variety.

Among dedicated VA loan lenders, Veterans United stands out for offering more VA loan types than similar lenders and having reasonable rates and credit score requirements. Beyond the usual purchase, refinance and IRRRL (streamline) VA loans, Veterans United home loans include Jumbo VA loans, VA energy-efficient mortgages and VA cash-out refinance loans.

Jumbo VA loans can be a good option for veterans who no longer have their full VA entitlement, which means that their VA loans have a limit placed on the total amount borrowed (unlike veterans with full entitlement). Energy-efficient mortgages are not common to VA loans and are a good option for anyone looking to add energy-efficient improvements to their new home (but not appliances).

Unfortunately, borrowers looking for home equity lines of credit (HELOCs) should look to other lenders for these types of loans.

HIGHLIGHTS

Minimum Credit Score

620

Minimum Down Payment

$0 for qualifying borrowers

Mobile App

Yes

NMLS ID

1907

Pros

• Rates starting at 5.25% (5.529% APR)

• Second-lowest fees of any lender we’ve reviewed

• Up to $1,500 in lender credits offered

• $500 reward for making 60 consecutive on-time payments

Cons

• Alternative or non-traditional credit and income data not considered for loan applications

• Membership required to apply; must open savings account with a $5 deposit

Why we chose it: PenFed currently offers the second-lowest mortgage rates for borrowers with credit scores as low as 620, which makes it our pick for the best VA loan lender for competitive rates.

When it comes to VA loans and mortgages, PenFed Credit Union stands out for offering some of the lowest rates across the board. In addition to a substantial loan offering (conventional, FHA, VA, Jumbo and adjustable-rate mortgages), PenFed has several financial incentives for borrowers.

The first is a $500 reward for making 60 consecutive on-time payments. It may not sound like much overall, but it’s certainly a nice bonus for being responsible with your mortgage payments. The second incentive is a potential $1,500 in lender credits offered toward your loan closing fees, which can help reduce the out-of-pocket spending on your loan.

HIGHLIGHTS

Minimum Credit Score

620

Minimum Down Payment

0% for qualifying borrowers

Mobile App

Yes

NMLS ID

401822

Pros

• Accepts credit scores as low as 600

• Variety of mortgage products available

• Self-employment and nontraditional income accepted

Cons

• Physical branches only in Missouri

• Other fees apply

North American Savings Bank is dedicated to servicing customers in the Kansas City, MO area, but it extends its mortgage services to individuals all over the U.S. Notably, NASB offers borrowers with credit scores as low as 600, lower than what other many lenders allow.

Customers can see potential rate scenarios using NASB’s mortgage rate calculator. Another plus: NASB charges no origination fees on their VA loans. For example, for someone with poor credit (600 to 659 FICO), a 30-year fixed-rate VA loan of $300,000 with no down payment carries an interest rate of 7.75%. The APR for this scenario is $8.444% and the monthly payment is $2,226.61.

In addition to standard VA loan products (purchase, IRRRL, cash-out refinance), North American Savings Bank offers the widest variety of mortgage options for individuals who are unable to provide “traditional” credit and income data, such as the self-employed.

HIGHLIGHTS

Minimum credit score

600

Minimum down payment

0% for qualifying borrowers

Mobile App

Yes

NMLS ID

400039

Pros

• Good interest rates

• Variety of loans

• Covers the appraisal, title and VA funding fees for VA IRRRL loans

Cons

• Requires membership in USAA

• No home equity loans or lines of credit

Why we chose it: USAA is perhaps best known as an insurance company specifically geared towards current and former members of the military, their spouses and children. However, the financial institution offers a complete array of financial products, including mortgages. When you add in plenty of perks for homeowners, USAA is our top pick for best for all-in-one home services.

You’ll find interest rates for VA Purchase Loans and VA Jumbo Purchase Loans, as well as conventional loan options, are among the lowest on the market at USAA. First-time homebuyers will find plenty of educational tools to help them through the homebuying process, plus mortgage calculators to help determine how much home you can afford. You can apply for both a mortgage preapproval letter and the loan itself online.

Like many of the top VA mortgage lenders, USAA allows borrowers to pay $0 down on their home purchase loans. More importantly, USAA covers the appraisal, title and VA funding fee on VA Interest Rate Reduction Refinance loans (IRRRL), making it a great choice for homeowners looking to refinance their existing VA mortgage.

HIGHLIGHTS

Minimum Credit Score

620

Minimum Down Payment

$0 for qualifying borrowers

Mobile App

Yes

NMLS ID

401058

Pros

• Allows you to compare multiple mortgage lenders’ rates at the same time

• Over 1,500 partnered lenders in its network

• Offers credit monitoring tools

Cons

• Limited contact options

• Customer support does not address issues with the lender of your choice

• Does not service loans

Why we chose it: LendingTree is an online marketplace that allows you to compare rates on multiple products, from mortgages to personal loans and even credit cards, making it our pick for the best marketplace for comparing VA loan rates.

LendingTree stands out from its competition due to its more than 1,500 partnered mortgage lenders and easy-to-use mobile app.

Borrowers can request multiple quotes (up to three at the same time), which include projected rates and closing costs all in one place. It is also free to use and doesn’t impact your credit score.

The only notable downside to LendingTree’s services is that the company is not a loan servicer or originator, meaning that its customer support will not handle most issues that may come up during your loan process.

HIGHLIGHTS

Minimum Credit Score

Varies by lender

Minimum Down Payment

Varies by lender

Mobile App

Yes

NMLS ID

1136

Pros

• 550 credit score minimum is the lowest on our list

• Fully online loan process

• Variety of calculators and educational resources on their site

Cons

• Rates are only provided by calling for an estimate or signing up for online alerts

• High number of CFPB complaints

• Does not offer HELOCs

Why we chose it: Freedom Mortgage’s minimum credit score requirement of 550 for VA loans make it our pick for the Best VA loan lender for low credit scores.

Freedom Mortgage is a fully online lender that offers standard mortgage products such as conventional purchase and refinance loans, FHA, VA and USDA loans. What makes it stand out is its credit score requirement of 550 for VA loans, which is the lowest of any lender on our list.

Notably, its VA IRRRL loans require no home appraisal or income verification, which is not always the case with these loans. Freedom Mortgage also features several calculators and educational resources, which is always helpful for those unfamiliar with the mortgage process and its associated costs.

We should point out that Freedom Mortgage has had over 2,000 complaints lodged with the Consumer Financial Protection Bureau since 2019, most of them for conventional mortgages. Although this should not be a major concern for borrowers with low credit scores looking for VA loans, it is important information to keep in mind.

HIGHLIGHTS

Minimum Credit Score

550

Minimum Down Payment

0% for qualifying borrowers

Mobile App

Yes

NMLS ID

2767

Pros

• Minimum credit score is 580

• “I CAN” loan offers customizable loan terms

• Buydown option to lower interest rate for first 1-3 years

Cons

• No interest rate or APR info publicly available

• Must enter contact info to get rate estimates

New American Funding is our second pick for low credit score requirements for VA loans. While its 580 minimum credit score requirement is not unique on the list, it has a vast selection of mortgage loans. Beyond the VA Purchase Loan, there’s also a VA Native American Direct Loan, VA Energy Efficient Mortgage, VA Streamline Refinance Loan and VA Cash-Out Refinance.

Notably, it offers what NAF refers to as an “I CAN” loan, which allows you to choose a custom fixed loan term between eight and 30 years. It also offers a “buydown mortgage” option for VA loans, which allows borrowers to reduce the interest rate on their mortgage for the first one to three years of their loan.

HIGHLIGHTS

Minimum credit score

580

Minimum down payment

0% for qualifying borrowers

Mobile App

Yes

NMLS ID

6606

Pros

• Over 400 branches across 48 states

• Accepts credit scores as low as 600

• Offer specialized mortgages for physicians

Cons

• No branches in Alaska or West Virginia

• Rates not disclosed unless you call or submit an online form requesting a callback

• Phone customer service hours (M-F, 8:30 am-5 pm CST) may be too restrictive for some

Why we chose it: Fairway Independent Mortgage’s presence in 48 out of 50 U.S. states makes it our top pick for in-person mortgage loan servicing.

Fairway Independent Mortgage is notable for its many branches across all but 2 U.S. states (Alaska and West Virginia), making it an ideal choice for individuals who prefer in-person service.

Fairway also offers a broad range of mortgage products which can be helpful for those who are unable to qualify for a VA loan. Among these loan products are specialized physician loans aimed at medical professionals still working through repaying their student loans.

While not the lowest of our top picks, its minimum credit score requirement of 600 for VA loans is a plus, as it is below the VA’s recommended 620. However, its limited customer service hours and lack of rate information online may be inconvenient to some borrowers.

HIGHLIGHTS

Minimum Credit Score

580

Minimum Down Payment

0% for qualifying borrowers

Mobile App

Yes

NMLS ID

2289

Other VA loan lenders we considered

While there are many mortgage lenders with outstanding products and features, they don’t necessarily have everything that could make them one of our top picks.

We reviewed the following lenders, and while they meet some of our criteria for “top VA loan lenders” (low rates, VA loan experience, good customer service), they ultimately didn’t make the cut.

Veterans First

Thanks to its fully online mortgage process, Veterans First (NMLS ID 449042) is a great choice for military members deployed overseas. Its focus on VA loans also means that the company is better prepared to attend to the specific needs of military members and veterans during the mortgage process.

Why Veterans First didn’t make the cut: The higher-than-average credit score requirement (mid-600s) was a deciding factor in keeping it out of our top list.

Pros

• Fully online loan process, helpful for military members deployed overseas

• Educational resources

• Specializes in VA loans

Cons

• Higher credit score requirements than any lenders we’ve reviewed (mid-600s)

• Offers no home equity loans

• No rate information on its website

Paramount Bank

Paramount Bank (NMLS ID 551907) waives the lender’s origination fee ($1095) on all of its VA loans, making it an option worth considering. There are no prepayment penalties, either.

Why Paramount Bank didn’t make the cut: Its general lack of upfront information about rates, fees and credit score requirements kept it out of our top lenders.

Pros

• Origination fees waived for VA loans

• No prepayment penalties for VA loans

Cons

• No fee or rate information on its website

• No information on loan requirements on its website (minimum credit score, DTI, etc.)

Flagstar Bank

Flagstar Bank (NMLS ID 417490) is a notable mortgage lender thanks to its wide variety of mortgage loans offered and its collaboration with several special mortgage programs such as down payment assistance and home loan grants.

Why Flagstar Bank didn’t make the cut: Flagstar’s lack of branches in almost half of the U.S. and limited rate and fee information on its website kept it out of our top picks.

Pros

• Considers credit scores as low as 580 for VA loans

• Collaborates with down payment assistance and other special mortgage programs

• Large selection of mortgage products for those who don’t qualify for a VA loan

Cons

• Branches located in only 28 states

• $75 annual fee for home equity line of credit (HELOC) loans

• High number of complaints with CFPB in the last three years (1,000+)

PNC

PNC (NMLS ID 446303) has a standard offering of mortgage products, including conventional, FHA, VA, refinance and HELOC loans. PNC only offers a partially online loan application process. You have the option of performing a digital income and asset verification, but you must speak with a loan officer to go over the details of your loan.

Why PNC didn’t make the cut: While full details aren’t available without speaking to an agent, PNC’s rate calculator shows rates slightly higher than many of our top picks.

Pros

• Mortgage rate calculator allows for scenarios with credit scores as low as 620

• Individuals with credit scores under 620 may be offered alternative loan options

• Mortgage rates are only slightly above average (~0.2%)

Cons

• Relatively small selection of loan products

• No specialized VA loans

• Contact information and branch locations are not easy to locate

LoanDepot

LoanDepot (NMLS ID 174457) is a primarily online mortgage loan lender with several affiliate branches across the U.S. Its loan products include conventional purchase mortgages, FHA, VA, ARM (adjustable-rate) and 203k (FHA home renovation) loans. LoanDepot’s digital income and assets verification tools can significantly speed up the loan approval process in some cases.

Why LoanDepot didn’t make the cut: Credit score and other loan eligibility requirements aren’t disclosed on its website.

Pros

• Strong focus on digital mortgage processing allows a fully online mortgage experience

• Over 200 affiliate branches nationwide

Cons

• Credit score minimums and loan eligibility criteria are not disclosed upfront

• Relatively small loan offering

• No HELOCs offered

Guild Mortgage

Guild Mortgage (NMLS ID 3274) offers a variety of mortgage options beyond VA loans, including bridge mortgages that can help you sell your current home while shopping for a new one and energy-efficient mortgages.

Guild is also a good choice for people who prefer in-person service, since they have branches in all but seven U.S. states. Notably, Guild services its loans, which is something that not all mortgage loan originators do.

Why Guild Mortgage didn’t make the cut: No rate information is publicly available; you must contact Guild for details.

Pros

• Broad mortgage loan offering, including energy-efficient home mortgages

• Accepts down payment assistance programs

• Services its own loans

Cons

• Rates are only disclosed after reaching out to Guild

• No branches in IN, KY, MI, MN, MS, NY, or WV

Guaranteed Rate

Guaranteed Rate (NMLS ID 2611) is a mortgage lender that allows borrowers to fully process their loan applications online, from start to finish. Individuals who prefer in-person service can also go to one of its 500+ locations across 46 states.

Based on Guaranteed Rate sample mortgage rates, on a $300,000 VA loan with a $0 down payment, the interest rate is 6.125% for buyers with FICO scores of 680.

Why Guaranteed Rate didn’t make the cut: Its VA loan product offerings are limited.

Pros

• Housing market research tool available

• Home valuation tool available

• Credit scores as low as 580 accepted for VA loans

Cons

• Conventional mortgage rates are higher than average (around 0.7% higher)

• Limited offering of VA loan products

Movement Mortgage

Movement Mortgage (NMLS ID 39179) is an online mortgage lender that claims to be able to fully close on a loan in under two weeks, though these results will depend on each borrower’s situation. Notably, Movement considers credit scores as low as 580 for VA loan applications, well under the VA’s suggested 620.

Besides its VA loan products, Movement also has several down payment assistance and high-balance mortgage options, which are helpful for individuals looking to purchase in high cost-of-living areas.

Why Movement Mortgage didn’t make the cut: Rate information isn’t publicly available to potential borrowers; you must contact the company for details.

Pros

• Offers several high-balance mortgage products (jumbo loans)

• Considers credit scores as low as 580 for VA loans

• Down payment assistance options available

• Streamlined underwriting process that can close loans in as little as a week

Cons

• Mortgage rates can only be obtained after contacting Movement

• No 24/7 customer service

• No physical locations

NBKC Bank

NBKC Bank (NMLS ID 409631) is a Kansas/Missouri regional bank that extends its mortgage services nationwide. While its loan offerings are standard (conventional, FHA, VA), it offers specialty home loans for pilots.

Notably, it is one of the few lenders that allows customers to obtain mortgage rates for credit scores under 500, although you’re not guaranteed results below that threshold. Its mortgage rates are also considerably higher than average (up to 1.5% higher).

Why NBKC Bank didn’t make the cut: Its VA loan rates are a bit higher than those of our top picks.

Pros

• Provides nationwide mortgage service, despite being a regional bank

• Mortgage rate calculator allows credit scores in the 300s

• Offer specialized mortgages for pilots

Cons

• Only four branches split between Kansas and Missouri

• Mortgage rates can be as much as 1.5% higher than our top picks

• Mortgage rate calculator is not easy to access

VA Loans Guide

Like a USDA loan, a Veteran Affairs loan is a government-backed mortgage program. Read on to learn more about VA loans, their pros and cons, the associated costs and how to apply.

How do VA loans work?

Like a USDA loan, VA loans are mortgage loans issued by private lenders but guaranteed by the federal government. However, Veterans Affairs loans are guaranteed specifically through the U.S. Department of Veterans Affairs. This means the government will repay part or all of the loan if the borrower defaults.

Beyond military service requirements, some VA loan lenders require specific standards of creditworthiness. These details will vary by lender, but can include a credit score of 620 or higher and a debt-to-income ratio of 41% or less. (You can calculate your specific percentage using our debt-to-income ratio calculator.)

Pros and cons of VA loans

When shopping for a VA loan, consider the advantages and disadvantages of this type of loan. For example, although VA loans offer lower interest rates than traditional mortgages, they are not necessarily the best choice for buying, improving, building, or refinancing rental properties.

Read below to find out more about the pros and cons of VA loans.

Pros

• <li style=”font-weight: 400;” aria-level=”1″><span style=”font-weight: 400;”>Lower interest rates than traditional mortgages</span></li> <li style=”font-weight: 400;” aria-level=”1″><span style=”font-weight: 400;”>0% down payment for qualified borrowers</span></li> <li style=”font-weight: 400;” aria-level=”1″><span style=”font-weight: 400;”>Allows a higher debt-to-income ratio than traditional mortgages</span></li>

Cons

• <li style=”font-weight: 400;” aria-level=”1″><span style=”font-weight: 400;”>VA funding fee required</span></li> <li style=”font-weight: 400;” aria-level=”1″><span style=”font-weight: 400;”>Requires an inspection and appraisal</span></li> <li style=”font-weight: 400;” aria-level=”1″><span style=”font-weight: 400;”>Not allowed for investment or vacation properties</span></li>

VA loan rates

Mortgage rates for VA loans are typically lower than conventional loans and even FHA loans. However, interest rates are set by private lenders, not the federal government, and are subject to daily market fluctuations. Rates will also vary slightly for each VA loan type (fixed, streamline, cash-out and jumbo) and term (15-year or 30-year).

As of July 2022, the VA loan mortgage rates from some of our featured lenders range from 4.375% to 5.525% APR. Many lenders list their mortgage rates online, but others allow you to file for an online quote or contact one of their representatives for more information.

VA loan closing costs

The VA Funding Fee is an upfront mortgage insurance provision added to the mortgage amount. The fee can range from 1.4% to 3.6% of the loan, but the exact percentage will depend on the down payment, loan type, and whether it is your first time using a VA-backed loan.

The funding fee is added to the mortgage amount and can be either financed over the term of the loan or paid upfront at closing. The fee may be waived for veterans on a service-related disability or active-duty service members who can prove to be Purple Heart recipients at closing.

Other closing costs associated with VA loans include:

• Real estate commissions

• Brokerage fees

• Loan origination fees

• Discount points

• Appraisals

• Title fees

VA mortgage lending rules allow a property seller to make “seller’s concessions,” that is, contribute to the veteran’s closing costs for up to 4% of the total loan amount. The veteran can also cover closing costs through a gift from a family member.

To help calculate how much you’d pay for a new mortgage, check out our mortgage calculator. If you’re looking into refinancing, our mortgage refinance calculator can give you an idea of how much you’d pay.

Types of VA loans

The U.S. Department of Veterans Affairs offers four different loan types — VA purchase loan, interest rate reduction refinance loan (IRRRLs), cash-out refinance loan, and Native American direct loan — each with its own set of requirements and limitations. Evaluate all loan options before deciding which best VA mortgage lender suits your needs.

Purchase loan

Purchase loans are used to finance the buying of a primary residence, make energy-efficient upgrades to an existing home or buy property to construct a house. Purchase loans can be fixed-rate or adjustable-rate. A fixed-rate loan means monthly payments remain the same through the life of the loan, whereas an adjustable-rate loan features interest rates and mortgage payments that may change.

Purchase loans can’t be used to buy an investment home, vacation house, rental property, or a fixer-upper in need of significant repairs. The VA no longer places maximum loan limits, but your VA mortgage lender might. In most U.S. counties, the maximum loan amount for 2023 is $726,200, but it can be as high as $1,089,300 in more expensive areas.

Interest Rate Reduction Refinance Loan (IRRRL)

Designed to refinance an existing VA mortgage, a streamlined refinance can get you a lower interest rate, reduce the loan term, or go from a variable-rate to a fixed-rate mortgage.

Cash-out refinance loan

A VA cash-out refinance replaces an existing VA loan and changes its terms to take advantage of home equity. Typically, it allows you to borrow up to 90% of your home value. The cash-out option also serves to refinance a non-VA-backed loan into a VA-backed loan.

To learn more, read our guide on how to refinance a VA loan.

Native American Direct loan (NADL)

NADL is the only VA loan managed and funded directly by the government entity. Veterans who are Native American (or whose spouses are Native American) are eligible for this loan. Borrowers can use this loan to buy, build, or improve a home on federal trust land.

As of this writing, there is no limit to the amount of money that can be borrowed with this program (aside from the limitations imposed by creditworthiness, DTI, and general Fannie Mae/Freddie Mac conforming limits, though borrowers can access higher limits if they choose to make a down payment).

If you also want to explore other options or check out current mortgage rates, our page of the best mortgage lenders can be an excellent place to start.

How to qualify for a VA Loan

The VA home loan program and its military benefits are available for:

• Active-duty military members

• Veterans

• Past and present members of the National Guard

• Surviving spouses of military personnel who died in combat

A VA home loan does not have a minimum credit score requirement, but most participating VA loan lenders require a minimum credit score of 620. Our advice? Always check your credit report and debt-to-income ratio before applying for a loan and improve it if you can.

For more information, read our guide on how to dispute your credit report.

Service requirements

Veterans and active-duty service members must have served at least 90 days during wartime or 181 days during peacetime. National Guard members must have served at least 90 days of active-duty service during wartime or six years of creditable service in the Select Reserves or Guard.

Once deemed eligible, you must apply for a Certificate of Eligibility (COE). The COE proves to the VA mortgage lender that you meet the VA’s eligibility requirements.

How to apply for a VA home loan

After confirming eligibility for a VA loan, take the following steps to apply:

• Gather the information you need to apply for your Certificate of Eligibility (COE). You can apply online through your lender using a WebLGY system or by mail downloading a VA Form 26-1880

• Submit your loan application. The lender will request a VA appraisal of the house. The lender reviews the appraisal and your credit income and decides if it accepts your loan application

• Apply for your COE and contact your state’s regional VA loan center to start the process directly with the government, in the case of Native American Direct Loans.

Once your lender accepts your application, they’ll work with you to select a title company (or entity) to close on the house.

If you have any questions that your lender can’t answer, please call your VA regional loan center at 877-827-3702. You can also watch a video on the official U.S. Dept. of Veteran Affairs’ YouTube page to learn more about VA home loans and how to apply.

When shopping for a VA loan lender, we recommend the following steps.

1. Choose a lender that can address your economic needs. If you’ve had financial trouble in the past, focus on VA lenders with lower credit minimums.

2. Get prequalified, as this lets you know if you’re eligible for a VA loan and how much you can borrow with the lender.

3. Compare quotes from at least three companies since this lets you see how much you’d be spending if you committed to a specific lender.

VA loan terms, rates, monthly payments, and closing costs vary significantly from provider to provider, so having multiple quotes can help you choose the one that hits all your financial goals.

Key takeaways:

• Choose lenders that work with your economic needs in mind

• Get prequalified

• Compare quotes from at least three lenders

How to get a VA loan with bad credit

Some lenders will issue a VA loan to veterans and service members with credit scores as low as 580. However, most lenders will require a minimum credit score of 620.

If you don’t meet the minimum credit score required, paying the bills on time, paying off any debt you currently have and contacting the reporting agency to fix any errors are some steps that can help improve your score.

Latest News on VA Loans

To learn more about mortgage loans, we recommend you start with our guide on 9 Types of Mortgage Loans. Our guide includes in-depth information on loan types, terms and interest rates. You should also get familiar with how to shop around for a mortgage.

If you’re looking to purchase your first home, you can also read our first-time homebuyer guide about the different programs that can help you achieve your homeownership goals. You might also want to research what to look for when buying a home.

For those currently operating outside of the U.S., read through our 6 tips for active duty military members looking to buy a home while overseas.

Although the VA loan program offers favorable terms like no down payment and no private mortgage insurance (PMI) to those who qualify, private institutions still issue the loans just like any other mortgage. Conduct thorough research and compare offers before deciding on a lender.

VA loans don’t require a down payment because the government guarantees the loan. However, putting money down can cut your costs in the long run. Read our article to learn more about the advantages of making a down payment on a VA loan.

Lastly, many of the best VA loan lenders right now are banks that cater specifically to members of the military, their families and even federal employees. Read our list of the best military banks and credit unions to find a one-stop shop for your mortgage and banking needs.

Best VA Loan Lenders FAQ

What are VA loans?

A VA loan is a no-down-payment mortgage military benefit partially backed by the Department of Veterans Affairs (VA). Borrowers can use the loans for the purchase of a primary residence or to refinance an existing mortgage.

Who qualifies for a VA loan?

To qualify for a VA loan, you or your spouse must meet the basic service requirements set by the Department of Veterans Affairs (VA), have a valid Certificate of Eligibility, and meet the lender’s income and credit requirements.

How many times can you use a VA loan?

You can use a VA loan more than once but only to purchase or refinance a principal residence, provided you meet the availability requirements. However, you may be able to use a partial entitlement for a second loan if you haven’t used it all on your first mortgage. Remember that using a partial entitlement may mean you’ll need to shell out a down payment and a higher VA funding fee.

Are VA loans assumable?

Because VA loans are backed by the U.S. government, they can be assumed by a new lender even if they are not active military or veterans. In order to assume a VA loan, the new borrower must have a minimum credit score of 580, a DTI of 45% or lower, pay the VA funding fee and ensure the home will be their primary residence. In some cases, a down payment may also be required.

How long does it take to close a VA loan?

VA loans typically take a little longer than a traditional mortgage loan to close. Although the experience may vary from one person to another, VA loans take about 50 to 55 days to close on average. However, it is possible to close on a VA in as little as 30 days in some cases.

How We Chose the Best VA Loan Lenders

Given that many mortgage lenders offer similar products across the board, we narrowed our search criteria to three factors: rates, experience and customer service.

• Rates – We chose VA loan lenders that offered the lowest rates to ensure your mortgage payments fall in line with your budget.

• Experience in VA Loans – We prioritized VA mortgage lenders that process many VA loans. Having a VA mortgage lender who is familiar with this process ensures that every step is taken care of on time.

• Customer Service – We highlighted VA mortgage lenders that excel in customer satisfaction and provide first-time homeowners step-by-step guidance throughout the pre-approval, application and loan closing.

We also made sure that our picks are registered with the Nationwide Multistate Licensing System and Registry (NMLS) and meet the minimum certification requirements for mortgage lending.

Though we always try to include accurate and up-to-date information on regulatory and legal actions, we don’t claim this information is complete or fully up to date. Interest rates and annual percentage rates are subject to change. As always, we recommend you do your own research as well.

Summary of Money’s Best VA Home Loan Lenders of April 2023

• Navy Federal: Best Overall

• Rocket Mortgage: Best Online Loan Lender

• Veterans United: Best for Loan Variety

• PenFed: Best for Competitive Rates

• NASB: Runner-Up for Best for Competitive Rates

• USAA: Best for All-in-One Home Services

• LendingTree: Best for Comparing VA Loan Rates

• Freedom Mortgage: Best for Low Credit Scores

• New American Funding: Best for Low Credit Scores Runner-Up

• Fairway Independent Mortgage: Best for In-Person Service

© Copyright 2023 Money Group, LLC. All Rights Reserved.
This article originally appeared on Money.com and may contain affiliate links for which Money receives compensation. Opinions expressed in this article are the author’s alone, not those of a third-party entity, and have not been reviewed, approved, or otherwise endorsed. Offers may be subject to change without notice. For more information, read Money’s full disclaimer.