VA Loan Field Guide

Who qualifies for VA loans?

The VA home loan benefit is one of the most powerful financing tools in America, and one of the most underused. You may qualify if you are:

• Active-duty service member with at least 90 continuous days of service (wartime) or 181 days (peacetime)
• Veteran with qualifying service (typically 24 months continuous active duty, with exceptions)
• National Guard or Reserve with 6 years of service OR 90 days of active service under specific orders
• Surviving spouse of a service member who died in the line of duty or from a service-connected disability
• Discharged with anything other than dishonorable conditions

The $0 Down math (full entitlement)

If you have full VA entitlement (never used the benefit, OR used it and paid off the loan, OR used it and sold the home), you have NO VA loan limit. You can buy at the price you qualify for, with $0 down.

Real example: $625,000 California home, VA loan, $0 down. Funding fee 2.15 percent ($13,438) financed into the loan. Up to 4 percent seller credit ($25,000) negotiated to cover closing costs and prepaids. Result: out-of-pocket cost at closing in a low four-figure range plus reserves. Exact math depends on credit, income, and underwriting.

Tier 2 entitlement: when you already have a VA loan

If you currently have an active VA loan (perhaps you bought a home, kept it as a rental, and want to buy another), you have Tier 2 entitlement. Math is more complex.

The calculation: county conforming limit minus your active VA loan balance equals your remaining entitlement. If the new home price exceeds the remaining entitlement, you need a down payment to make up the gap.

Use the VA 2nd Use Entitlement Calculator at kenclarkjr.com/va-second-use to model your scenario.

VA funding fee: who pays, how much, who is exempt

The funding fee is a one-time charge that helps fund the VA loan program. It is typically financed into the loan, not paid at closing.

Funding fee EXEMPTIONS:

• Veterans with a VA service-connected disability rating (10%+)
• Surviving spouses of service members who died from a service-connected cause
• Purple Heart recipients

VA loans vs. conventional vs. FHA: which wins?

For most eligible veterans buying a primary residence, VA wins. The absence of monthly mortgage insurance is the dominant factor over a long hold.

VA refinance options

IRRRL (Interest Rate Reduction Refinance Loan)

Streamlined refinance for veterans already in a VA loan. Lower documentation, no appraisal in most cases, no income re-verification typically required. Useful when rates drop.

VA Cash-Out Refinance

Refinance into a VA loan from any loan type AND take cash out. Up to 100 percent LTV in some cases. More documentation than IRRRL.

Common VA misconceptions

• "VA appraisals always come in low." Not necessarily. VA appraisers follow specific guidelines, but they reach market value when properties support it.
• "VA loans take forever." Our average VA close is 14-21 days, faster than most FHA loans.
• "I can only use VA once." Wrong. Tier 2 entitlement lets you have multiple active VA loans under specific conditions.
• "VA buyers lose in multiple-offer situations." Sometimes true in hot markets, but a strong VA pre-approval letter and a clean offer structure can win.