3 Ways VA Loans Boost Access to Homeownership

Editor’s Note: This post was originally published in April 2017. 

Key Takeaways

• VA loans can help eligible veterans, servicemembers and surviving spouses buy homes.
• VA loans have  more flexible credit score requirements than most other mortgages.
• You may be able to qualify for a VA-backed mortgage with no down payment.

Editor’s Note: This post was originally published in April 2017. 

Are you a veteran or servicemember hoping to buy a home? In 2026, the high cost of housing is making homeownership unaffordable for many Americans. However, for veterans, a VA loan can make your dream of owning a home much more accessible.

VA loans, which were created in 1944, are designed to help veterans and military families get a shot at homeownership. Over 80 years later, this historic benefit program is still making a difference for a new generation of military homebuyers.

VA loans help eligible veterans and service members qualify for financing by offering more flexible and affordable requirements than most other mortgages. Here’s how they can help you.

What is a VA loan and where can you apply?

A VA loan is a home loan backed by the Department of Veterans Affairs (VA). These loans are available to veterans, servicemembers and their families to help them buy, build or improve their housing. 

Some people mistakenly assume they have to apply for these loans directly through the VA. But in order to take out a VA loan, you have to go through a bank, credit union or mortgage company that works with the VA. 

What part does the VA play in offering the loan? To help you qualify for a mortgage, the VA “guarantees” a portion of the loan, meaning it promises the lender that it will cover some of the money if you fail to repay. As a result, these loans have more flexible requirements to qualify than most other loans.

How do VA loans make it easier to buy a home?

Let’s look at three big ways VA loans fulfill their mission of boosting access to homeownership. 

1. More flexible credit score requirements

Many mortgage lenders require you to have credit scores of 660 or higher to qualify for their loans. With VA loans, each lender sets the minimum score, but they may approve you with scores of 620 or lower. As a result, you should find it easier to qualify for a VA loan than any other type of mortgage.

The VA loan program is also more forgiving when it comes to negative information on your credit reports, such as bankruptcy, foreclosure or short sales. Depending on your circumstances, you may even qualify immediately after a short sale.

With that said, there are still major advantages to having good credit. The higher your credit scores, the lower your interest rate will be, which can save you tens of thousands of dollars on interest charges over the life of your loan.

For example, if you have a 30-year, $400,000 VA loan with 7% fixed APR, your total interest charges over the life of the loan will be roughly $558,036. But if your rate is 6.5%, your total interest charges will come out to roughly $463,354. That’s a savings of $94,682.  

Not sure how to improve your credit scores and get the interest rate you want? If you have questions about how to gain points or you want a full professional review of your credit reports, NFCC-certified credit counselors are here to help! 

2. A down payment may not be required

For conventional mortgages (or mortgages that aren’t backed by the government), the average down payment was 15% in June 2026. For a $450,000 home, that’s a $67,500 down payment.

For military families, frequent moves and unexpected deployments can make it hard to save this amount of money. But VA home loans provide a solution: mortgages with $0 down payment required, as long as the sales price isn’t higher than the value of the home. That means, for aspiring homebuyers who are just starting to save, you may be ready to use your VA benefit to buy a home. 

3. No private mortgage insurance (PMI)

For people who take out conventional mortgages, putting less than 20% down can make the loan more expensive. 

When your down payment is under 20%, you typically have to pay private mortgage insurance (PMI) each month until your loan balance drops below 80% of the home’s value. Unfortunately, this can add hundreds of dollars to your housing expense each month.

With VA loans, you don’t have this issue. Since the VA backs your loan, you can make a $0 down payment and avoid PMI altogether.

With that said, it’s worth noting that you may have to pay a VA Funding Fee up front, plus closing costs on your loan. In 2026, VA funding fees range from 0.5% to 3.3% of your loan amount.

Which type of mortgage is best for you?

There’s no “best mortgage” out there for every person. The best type of mortgage for you  depends on your individual needs and financial circumstances. But for eligible homebuyers, a VA loan is certainly worth serious consideration. Why? Because there’s no other way to secure financing from a trustworthy lender when you have low credit scores and no down payment. 

If you want to talk to a nonprofit credit counselor to get a better sense of your mortgage options, or you’d like more education and resources on homebuying, the NFCC is here to help!