What is a VA loan?

A VA loan is specifically designed to support veterans, active-duty service members, and certain members of the National Guard and Reserves in obtaining home financing. This type of loan is backed by the Department of Veterans Affairs, which means that it provides a guarantee to lenders, making them more willing to offer favorable terms to borrowers who are veterans. This includes benefits such as no down payment requirements in many cases, competitive interest rates, and no need for mortgage insurance.

By focusing on veterans and service members, the VA loan program acknowledges their service and aims to make homeownership more accessible for them. This distinctive nature of VA loans sets them apart from other types of loans, including conventional loans and FHA loans, which are backed by different entities and have different eligibility criteria and benefits.