VA loans are a valuable tool that veterans and service members can use to purchase homes with little to no down payment, no private mortgage insurance (PMI), and very competitive rates. For those who may not have the typical 20% down payment required by lenders for non-VA loans, this makes buying a home affordable to a broader audience.
Current active duty military service members, veterans, spouses of veterans who died in service or from a service-connected disability and have not remarried, spouses of service members who are missing in action or are prisoners of war, and surviving spouses receiving Dependency and Indemnity Compensation all can qualify for a VA loan.
We reviewed 18 lenders to arrive at the best loan rates and terms for VA loan programs. The key criteria we reviewed were the length of the loans, the current rates, the minimum credit scores lenders accept, the application process, autopay features, and the customer service channels available. These are our top picks.
Best Overall : Veterans United
Veterans United won best overall for VA loan rates because this lender specializes in VA loans, veterans are their primary clients, and they have many loan program options.
High customer service ratings
Comprehensive loan offerings
Veterans United Realty
No mobile app
Founded in 2002 and built for veterans, Veterans United Home Loans was honored in 2019 by the Department of Veterans Affairs for issuing the official 24 millionth VA mortgage for the 75-year-old VA program. Veterans United closed more VA loans than any other lender in 2016, 2017, 2018, 2019, and 2020.
Veterans United won best overall because they were founded for veterans and service members and they continue to be solely focused on this consumer category. The company’s website and support staff lead the veteran from loan eligibility to credit counseling if necessary, and then quoting. They have no-down-payment programs and programs tailored for first-time homebuyers.
The company offers nine VA loan programs. Their six 30-year programs include a Fixed-Rate program, a Streamline Interest Rate Reduction Refinance Loan (IRRRL), 30-Year VA Cash-Out, VA Fixed Jumbo, 30-Year Streamline Jumbo, and 30-Year Cash-Out Jumbo.
The Lighthouse Program offers free credit counseling as well as tools to improve your credit score and financial profile.
Veterans United Realty is a nationwide network of Veteran-friendly real estate agents. These independent partners specialize in the VA loan process, so the real estate agent and bank are in sync throughout your entire home-buying experience.
Current VA loan interest rates are 2.750% for a 30-Year Fixed and 2.990% for their 30-Year VA Cash-Out Jumbo program. You can see the rates for additional loan types on their website. While the VA loan program does not set a minimum credit score, Veterans United does set their own requirements.
To apply, you first need a loan pre-approval. The loan process takes between 30 and 45 days once you’re under contract on a home. Then you need to obtain your COE (certificate of eligibility) from your lender or on your own. Lastly, you need to finalize your loan application and provide all necessary paperwork like W-2s, tax returns, and financial information.
Borrowers have the option to buy down their interest rate by purchasing discount points. When you purchase discount points, you are essentially paying interest upfront to receive a lower rate over the life of the loan. Once your loan is set up, you can choose to use their automatic payment option, however, there is no further discount incentive for using autopay.
Consumers can get service online or by phone from one of their 24/7 operators at 800-884-5560.
Best 30-Year Fixed : PenFed Credit Union
PenFed Credit Union earned our top spot for best 30-year fixed because its rates tend to be low, carries no lender fees, provides 24/7 account access online, has discounts for members, and serves members in global locations.
24/7 access online
Must be a member by opening a savings account
No mobile app
PenFed, established in 1935, is now a credit union with a global presence, 24/7 account access, and is federally insured by the National Credit Union Administration (NCUA).
Their current 30-year fixed interest rate is very low with no points, which keeps closing costs low, earning PenFed our award for best 30-Year Fixed loan. PenFed serves members in all 50 states, the District of Columbia, Guam, Puerto Rico, and Okinawa.
The PenFed Foundation is a nationally recognized 501(c)(3) nonprofit. The foundation helps people through financial education, credit-building, homeownership, and short-term financial assistance. Financial assistance and resources are available to service members, veterans, and Wounded Warriors who need continuing treatment or financial assistance in buying or keeping their homes.
In addition to a 30-year fixed, PenFed also underwrites a 15-year fixed program. The 15-year rate is currently very competitive as well.
You begin the process by clicking their "Apply Now" button. You then have a choice to either complete a form so that a loan officer can call you back to discuss your options or you can complete their online Pre-Approval form.
Like other lenders, once you are pre-qualified you will apply for your Certificate of Eligibility online. PenFed will order an appraisal of the home you want to buy and then review the appraisal result when it’s ready alongside your credit and income information. Finally, rates and terms are locked in, and PenFed works with you to select a title company, most likely PenFed Title, LLC, and they schedule your closing to transfer ownership. The entire process takes about four weeks to six weeks.
PenFed has an autopay process, but it does not come with a discount. Consumers can get service through the online Pre-Approval or Call Back forms, or by calling 800-970-7766. There are branches in the Washington, D.C., area where you can schedule an appointment to meet in person.
Best 15-Year Fixed : Navy Federal Credit Union
Navy Federal Credit Union (NFCU) has our best 15-year fixed VA loan rate program because the current rate is only 2.25%, among the lowest of any lender.
Rate Match Guarantee
Homesquad and Realty Plus
Lower credit scores accepted
Must be a member by opening an account
NFCU is a member-owned, not-for-profit credit union founded in 1933 and federally insured by NCUA. They earned our nod for best 15-year fixed-rate loan because their current rate, 2.25%, is the lowest among lenders. NFCU also stands out because of its unique service programs that support that low rate.
NFCU’s exclusive Home Squad and Realty Plus programs assist you with your loan, finding a real estate agent, title services, and loan services through the life of the loan. Realty Plus not only matches you with a local, specially trained real estate agent but also gets you $400 to $8,000 cash back on your loan. They offer Freedom Lock, which allows you to lock in new, lower rates at no cost, no PMI requirements, and no down payment. Their current 30-year rate is 2.375%.
The NFCU Homesquad offers professional step-by-step guidance and advice to keep you on track as you work through the loan pre-approval, certificate of eligibility, appraisal, and your credit and income history analysis. NFCU works exclusively with military personnel and families and shows high ratings in customer service and satisfaction. You can set up automatic payments for your mortgage but there are no discounts for this. For consumer service, stateside reps are available 24/7 at 888-842-6328 and internationally at 1-703-255-8837. You can also contact NFCU by secure message, website chat, social media, and in person.
Best Jumbo Loan : USAA
We awarded USAA the best for VA jumbo loans because it allows you to borrow up to $3 million, carries no private mortgage insurance, and allows you to finance the VA funding fee.
Full-service banking and lender
Insurance products like home, auto, health, life
Personalized service for the jumbo loan process
Must be a member
USAA is an organization that offers military members and their families a comprehensive range of financial products and services that are competitively priced. They offer benefits, insurance, advice, banking, investment products, specialized financial resources, and member discounts.
USAA lends nationwide to veteran borrowers seeking a jumbo home loan all the way up to $3 million without needing to pay private mortgage insurance, and wrapping the VA funding fee into the loan.
USAA’s VA loan products include a fixed-rate 30-year purchase loan with rates starting at 3.250%, a jumbo fixed-rate purchase loan at 4.625%, and a VA refinance option: the VA interest rate reduction refinance loan (IRRRL) at 3.375%. USAA also has non-VA loan options.
To service your loan, USAA offers an autopay process, however, there are no discounts for using the program. Customer service is available through online chat, mobile app, and by telephone at 800-531-USAA (8722).
Best ARM Loan : LendingTree
LendingTree is the best for VA adjustable-rate mortgage (ARM) loans because it will provide you with more options to compare rates and terms across several lenders.
You fill out one application and lenders compete
Online form is user-friendly
Additional loan products you may need
Must fill out form to get your exact rates
LendingTree is an online loan marketplace for mortgages, auto loans, small business loans, personal loans, credit cards, and more. Started in 1996 with the goal of making comparison shopping for loans easy, they put the rates online to make banks compete. The company seeks to empower its customers with choice, education, and support through their website services.
Fewer lenders offer the ARM product compared to the fixed-rate purchase and refinance loans. Therefore, we chose LendingTree as the best source for finding a competitive ARM loan because you fill out a single application and many lenders will see your application and offer their best terms. The large supply of lenders on LendingTree provides the borrower with more choices to compare.
You can find all of the VA loan products we’ve reviewed so far at LendingTree. You cannot see rates without doing LendingTree's survey and soliciting offers. You can find 5-year, 7-year, and 10-year ARMs. VA ARM loans limit rate increases to 1% and no more than 5% over the life of the loan. Different lenders will be willing to work with different credit scores. Interest rates will be much higher for borrowers with lower credit scores, however.
Regardless of which lender you choose on LendingTree, the loan process for a VA loan will require an eligibility certification; evaluation of the borrower’s credit, income, and debt situation; plus an appraisal and home inspection. Plan on four to six weeks for the entire process.
Working with a lender through LendingTree means you’ll be working with a company that has some technology savvy. You’ll find auto payment options for your mortgage, but don’t expect a discount for using it. It’s become so convenient for borrowers that lenders just don’t need to entice borrowers with lower rates for using autopay anymore.
Customer care can be reached at 800-813-4620 or you can start the process online.
What Is a VA Loan?
A VA loan is backed by the government and is open to active and former service members and their surviving spouses in some cases. One can use a VA loan to purchase or build a home, improve and repair a home, or to refinance a mortgage. Significant benefits include reduced credit score requirements, no private mortgage insurance, no down payment requirement, and competitive rates.
You can apply for a VA loan more than once, but the funding fee increases when using a VA loan after your first time. The VA funding fee is a one-time charge that you pay when you get a VA-guaranteed mortgage to purchase or refinance your home. In many cases, you’ll have the option to roll the VA funding fee into your loan. The typical funding fee ranges from 1.4% to 3.60% of the loan amount.
You will need a certificate of eligibility (COE) which you can obtain from the VA website, or your lender can assist you with this. In order to get this certificate, you’ll have to produce service-related documentation, which can vary based on whether you are active duty or a veteran.
How Does the Cares Act Impact VA Loans?
The Coronavirus Aid, Relief, and Economic Security (CARES) Act, was signed into law on March 27, 2020, to help Americans economically impacted by COVID-19. The CARES Act’s aim is to help homeowners avoid home foreclosure.
The CARES Act created options for VA loan borrowers to avoid foreclosures, such as delayed and partial payments called “forbearance.” You can request a forbearance for up to 180 days without paying late fees or other penalties if you were affected financially by the COVID-19 pandemic. Other protections the CARES Act provides for VA mortgage-holders are a moratorium on foreclosures and credit score protection if you need to take advantage of the forbearance program.
Do VA Loans Vary by Lender?
The two main ways a VA loan can vary slightly from lender to lender are the rate and the minimum credit score. The Veterans Administration does not underwrite the loan; it provides a guarantee to the lenders who offer the loan program. The lenders determine the rate they will offer, as well as the other underwriting guidelines they will adhere to, such as your credit history and debt-to-income ratio.
Credit score minimum requirements differ slightly from lender to lender, with most settling on 620 as their accepted minimum. Credit limits are not set by the U.S. Department of Veteran Affairs. The VA’s only credit requirement is for the borrower to be considered a satisfactory credit risk by a lender.
The benefits of a VA loan are the same no matter which lender you choose. The key benefits of the program are no down payment requirement, no PMI requirement, and no prepayment penalties, with a VA funding fee taking the place of the PMI.
Why Do Sellers Seem to Dislike VA Loans?
The VA has what are called “minimum property requirements.” These include non-negotiable items like construction defects, termite infestation, leaks, decay, dampness, and continuing settlement in or near the foundation. While sellers engaged with buyers who bring a non-VA loan to the purchase can negotiate the repair costs of these types of items, the VA program requires these items to be fixed before they will give the lender the approval to back the lender’s mortgage loan to the borrower. That puts pressure on the seller to fix these issues primarily at their cost if they want to be able to sell their home to the buyer who presents with a VA loan in their pocket.
What Problems Arise in a VA Home Inspection?
If you are purchasing a home with a VA loan, you will be required to obtain a home inspection. The cost will vary by location but ranges between $300 and $500. You will also need to obtain an appraisal for your property. The VA inspection is much more in-depth than the home appraisal. The inspector will look at the home's structural integrity, plumbing and electric systems, HVAC, roof, attic and crawl spaces, wood-destroying insects, fungus and dry rot, radon gas, and if applicable, the well and septic systems.
The primary defective concerns the VA will have if discovered during the home inspection include construction defects, poor workmanship, foundation problems, dampness, leaks, decay, and termites.
How We Chose the Best VA Loan Rates
We reviewed the details of VA loan programs from 18 different lenders before we chose the best. Veteran-specific support, a streamlined application and underwriting process, logical website navigation, range of loan products, industry reputation for customer service, minimum credit score requirements, automatic payment features, and rates published as of September 2020 were our main investigation focus.