Not from the VA. The program sets no credit score requirement at all. Lenders set their own, most commonly around 620. Because it is a lender overlay rather than a program rule, a decline from one lender does not mean you are out of options.

Not from the VA. The program sets no credit score requirement at all. Lenders set their own, most commonly around 620. Because it is a lender overlay rather than a program rule, a decline from one lender does not mean you are out of options.

Sometimes, and more often than people expect. VA underwriting weighs residual income heavily, which can carry a file that would fail on credit alone. Recent bankruptcy or foreclosure has waiting periods, generally two years from a Chapter 7 discharge, but they are shorter than conventional guidelines require.

Sometimes, and more often than people expect. VA underwriting weighs residual income heavily, which can carry a file that would fail on credit alone. Recent bankruptcy or foreclosure has waiting periods, generally two years from a Chapter 7 discharge, but they are shorter than conventional guidelines require.

No, but it helps. You need it before closing. Pulling it early takes minutes, costs nothing, and settles both your eligibility and your funding fee exemption status before either can complicate a transaction that is already under contract.

No, but it helps. You need it before closing. Pulling it early takes minutes, costs nothing, and settles both your eligibility and your funding fee exemption status before either can complicate a transaction that is already under contract.

Not directly. The property must be your primary residence, with occupancy generally required within 60 days. A multi-unit property works if you live in one of the units. A home you bought with a VA loan and later moved out of can become a rental, which is a different situation from buying one as an investment.

Not directly. The property must be your primary residence, with occupancy generally required within 60 days. A multi-unit property works if you live in one of the units. A home you bought with a VA loan and later moved out of can become a rental, which is a different situation from buying one as an investment.

Rate and Sean Goudreau have no affiliation with any government agency.

(781) 202-9056

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VA loans for first-time buyers

If you have earned the VA benefit and you are buying your first house, this is almost certainly the loan you should be using. Here is why, what the process actually looks like, and where first-time buyers get tripped up.

Written by Sean Goudreau, Mortgage Loan Officer · NMLS #326155 · Rate

Can a first-time homebuyer use a VA loan?

Yes, and it is usually the best option available. A VA loan requires no down payment for buyers with full entitlement and charges no mortgage insurance, which is the two largest barriers to a first purchase removed at once. There is no first-time buyer restriction on the program and no penalty for using it on your first house.

How does a VA loan compare for a first purchase?

Most first-time buyers are choosing between three loans. On a first purchase with limited cash, the comparison is not close.

VA loan compared with FHA and conventional loans for a first home purchase
	VA loan	FHA loan	Conventional
Minimum down payment	None	3.5%	3%
Mortgage insurance	None	Upfront plus monthly, usually for the life of the loan	Monthly until 20% equity
One-time fee	Funding fee, 2.15% typical, financed	Upfront MIP, 1.75%, financed	None
Minimum credit score	Set by the lender, not the VA	580 for 3.5% down	Typically 620
Seller-paid closing costs	Yes, up to 4% in concessions	Yes, up to 6%	Yes, varies by down payment

The row that matters most is the second one. FHA mortgage insurance is not temporary for most borrowers, it lasts the life of the loan, and a conventional loan carries it until you reach 20% equity. A VA loan carries none from day one.

The funding fee is the honest cost on the other side, and it is real. But it is charged once, most people finance it, and many pay nothing at all. FHA's upfront premium is charged once too, and then the monthly premium runs for thirty years on top of it.

What does the process actually look like?

Roughly the same as any mortgage, with two VA-specific steps folded in. Here is the order it happens in.

Get your Certificate of Eligibility

This confirms your service qualifies you and states whether you are exempt from the funding fee. A lender can usually pull it in minutes. Do this first. It is free, it takes no commitment, and it settles two questions before either one can complicate a transaction.

Get pre-approved

A real pre-approval means a lender has looked at your income, credit and assets, not just asked what you earn. In a competitive market a seller's agent can tell the difference, and a VA offer backed by a weak pre-approval is the kind of thing that gets a file rejected for reasons that have nothing to do with the VA.

Find the house

Worth knowing here: the property has to meet the VA's Minimum Property Requirements, which cover safety, structure and sanitation. A house that needs significant work can stall a VA appraisal in ways it would not stall a conventional one. Your agent should know this before you write an offer.

Appraisal and underwriting

The VA appraiser does two jobs at once, valuing the property and checking those minimum requirements. Underwriting looks at your file, including residual income, which is a VA-specific calculation of what you have left each month after everything is paid.

Close

You will need to occupy the home as your primary residence, generally within 60 days. VA loans are not for investment property, though a multi-unit building you live in is allowed.

How much cash do you actually need?

Less than most first-time buyers expect, and the gap between what people think and what is true is the reason a lot of veterans rent longer than they need to.

There is no down payment with full entitlement. That is the largest number gone entirely.

The funding fee is usually financed rather than paid, so it does not come out of your pocket at closing.

Closing costs are real and they are the number people forget. Title, appraisal, origination, and prepaid escrows for taxes and insurance. On a typical purchase that lands somewhere in the low thousands.

A seller can pay some of it. VA rules allow a seller to contribute up to 4% of the loan amount in concessions, on top of customary closing costs. That is a meaningful lever and it is underused, particularly in a market where sellers are already offering credits.

Earnest money and inspection costs come earlier and come out of pocket. Budget for those separately.

Where first-time buyers go wrong

They shop against the wrong number. A generic calculator adds mortgage insurance a VA loan does not have and leaves out the funding fee it does. The result looks credible and is not, and a buyer plans a budget around it for weeks before a lender ever sees the file.

They never mention a disability rating. Any rating of 10% or higher removes the funding fee entirely. Nobody asks, so it never comes up, and a fee gets financed into a loan that should not have carried it.

They assume they need money down. It is the single most common reason a veteran does not use the benefit. Zero down is the program working as designed, not an exception you have to qualify for.

They take the first pre-approval and stop. The VA fixes the program terms. It does not fix your rate, your origination charges, or how competently the file gets worked. Those vary between lenders on the same borrower.

They write an offer on a house that will not pass. Peeling paint on a pre-1978 home, a failing roof, exposed wiring. All fixable, all better identified before you are under contract.

Frequently Asked Questions

Is a VA loan good for first-time buyers?

Usually the best option available. No down payment, no mortgage insurance, and flexible underwriting that weighs residual income rather than credit score alone. The main tradeoff is the funding fee, which is charged once and which many borrowers do not pay at all.

Can you use a VA loan and a first-time buyer program together?

Sometimes. Many state and local down payment assistance programs can pair with a VA loan, though the value is lower since there is no down payment to assist with. Closing cost assistance is often the more useful combination. Availability varies by state, so it is worth asking rather than assuming.

Do you need a good credit score for a VA loan?

The VA sets no minimum. Lenders do, most commonly around 620, and they vary. A first-time buyer with limited credit history is often better served by a VA loan than a conventional one, because VA underwriting weighs residual income heavily.

How long does a VA loan take to close?

Typically 30 to 45 days, which is comparable to any other mortgage. The VA appraisal can add a few days in some markets. The idea that VA loans are slow is largely a holdover from older process rules and it costs veterans offers in competitive markets.

Learn more about the VA loan

How VA loans workThe full picture, start to finish

Am I eligible?Service requirements and the Certificate of Eligibility

The funding feeRates by down payment and use, plus who is exempt

Payment calculatorModel a payment with the fee and no mortgage insurance

Buying your first house?

Start with your Certificate of Eligibility. It takes a few minutes and settles what you can actually do. No credit pull, no application.

No credit pull or application. Sean will reach out personally.

Sean Goudreau

Mortgage Loan Officer

NMLS #326155

Rate

465 Waverley Oaks Rd Ste 200

Waltham, MA 02452

(781) 202-9056

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