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The VA loan process

A VA purchase runs on roughly the same timeline as any other mortgage. What differs is a handful of VA-specific steps, and where those steps go wrong is almost always early, in the part most people treat as paperwork.

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

How long does a VA loan take to close?

Most VA purchases close in 30 to 45 days, comparable to a conventional loan. The process runs in five stages: getting your Certificate of Eligibility, pre-approval, finding a property and going under contract, appraisal and underwriting, and closing. The VA-specific steps are the Certificate of Eligibility at the start and the VA appraisal in the middle.

What should you do before you start looking?

Two things, and both are free.

Pull your Certificate of Eligibility. It confirms your service qualifies you, shows how much entitlement you have available, and states whether you are exempt from the funding fee. A lender can usually return it in minutes.

Doing this early is not about being organized. It is about leaving time to fix something. A COE with a missing exemption or unrestored entitlement is correctable in weeks and a disaster in days, and which one it is depends entirely on when you looked.

Then get pre-approved properly. Not a pre-qualification based on what you told someone over the phone, but a file where income, credit and assets have actually been reviewed. In a competitive market a listing agent can tell the difference, and it is the single biggest factor in whether your offer gets taken seriously.

If you have used the benefit before

Two extra things belong at this stage, and both are commonly skipped.

Check that your entitlement was restored. If you sold a home with a VA loan and paid it off, restoration is a request that somebody has to file. It is not automatic. Files stall here regularly, on loans paid off years earlier that nobody followed up on.

Check that your COE is current rather than assuming it is. A disability rating granted since your last purchase changes your funding fee status, and the document may not reflect it yet.

What happens during pre-approval?

A lender reviews your income, your credit, your debts and your assets, and issues a letter stating what you qualify for.

Two things get evaluated that are specific to VA loans. Residual income, which is the VA's requirement that you have a defined amount left over each month after the mortgage, taxes, insurance, debts and estimated maintenance. And your entitlement, which determines whether you can buy with nothing down and whether a loan limit applies to you.

Residual income is worth understanding because it can cut both ways. It can carry a file with a high debt-to-income ratio that a conventional underwriter would decline. It can also stop a file that looks fine on ratios alone.

This stage takes days rather than weeks, and the timeline depends more on how fast you send documents than on anything the lender does.

If you have used the benefit before

Rental income enters the picture if you kept the first house. Lenders treat it conservatively, and some will not count it at all without a documented history of receiving it. That is frequently the constraint on a second purchase rather than entitlement.

The funding fee also changes. Subsequent use on a zero-down purchase runs 3.3% rather than 2.15%, which makes putting 5% down a genuinely different calculation than it was the first time, since both first and subsequent use pay 1.5% at that threshold.

What happens when you go under contract?

The clock starts, and several things run in parallel.

Your lender orders the appraisal. Your inspection gets scheduled, and it is a separate thing from the appraisal with a different purpose. Title work begins. Underwriting starts pulling the file together.

The contract itself matters here in a way people underestimate. The closing date you agreed to sets everyone's timeline, and a date that was aggressive on paper becomes a problem when anything slips. A realistic date that you beat is worth more than an optimistic one you miss, particularly if you want the seller's agent to take the next VA offer seriously.

One VA-specific item belongs in the contract: the amendatory clause. It lets you walk with your earnest money if the property appraises below the contract price. It is standard on VA transactions and it is a protection rather than a weakness, though agents unfamiliar with VA loans sometimes describe it as the latter.

What does the VA appraisal check?

Two things at once, which is what makes it different from a conventional appraisal.

Value, the same as any appraisal. And the VA's Minimum Property Requirements, which cover safety, structural soundness and sanitation. Peeling paint on a pre-1978 home, a failing roof, exposed wiring, a heating system that does not work.

On a house in good condition, this is a non-event. On a property with real condition issues, it can stop the file until repairs are made, and that becomes a negotiation with a seller who may not want to make them.

This is the stage where problems surface that were avoidable earlier. An agent who understands VA requirements steers you away from a property that will not pass before you write the offer. One who does not, does not.

Underwriting runs alongside it. If your file was properly reviewed at pre-approval, this stage is mostly confirmation. If it was not, this is where the surprises live.

What happens at closing?

You receive a Closing Disclosure at least three business days before closing. It is a standardized form and it should match the Loan Estimate you got at the start. Comparing the two is the last opportunity to catch something, and it is worth actually doing rather than skimming.

Check the funding fee line. If you are exempt and it appears there, something went wrong upstream, and it is far easier to fix before closing than after.

You sign, the loan funds, and the property transfers. On a purchase you generally need to occupy the home as your primary residence within 60 days.

Then the last VA-specific item, which nobody mentions and which matters later. Your entitlement is now committed to this loan. If you sell in a few years and want to use the benefit again, restoration is a request somebody has to file at that point. Knowing that now saves a stalled file later.

What goes wrong, and when to catch it

Almost everything that derails a VA loan is visible weeks before it becomes a problem.

The funding fee exemption gets missed. A veteran with a disability rating never mentions it, nobody asks, and a fee gets financed into a loan that should not have carried it. Catch it when you pull the COE.

Entitlement was never restored. A loan paid off years ago still shows as committed. Catch it at the same time, before a property is involved.

The payment estimate was wrong from the start. Generic calculators add mortgage insurance a VA loan does not have and omit the funding fee it does. Catch it by running numbers that account for both.

The property will not pass the appraisal. Catch it before writing an offer, by working with an agent who knows what the VA checks.

The closing date was unrealistic. Catch it when writing the contract, not when asking for an extension.

Rules you remember have changed. Anyone who used the benefit before 2020 has outdated beliefs about county loan limits, which no longer apply with full entitlement. Catch it by asking rather than assuming.

Frequently Asked Questions

How long does a VA loan take from start to finish?

Typically 30 to 45 days from contract to closing, comparable to a conventional loan. Getting a Certificate of Eligibility and a pre-approval before that adds days rather than weeks, and both can happen well before you start looking.

Is the VA loan process different the second time?

The transaction runs the same way. What changes is entitlement, which may need restoring or may be partially committed, the funding fee, which rises on subsequent use with zero down, and rental income if you kept the first property. All three belong at the front of the process rather than the middle.

Can you start a VA loan before you have a Certificate of Eligibility?

Yes. You need the COE before closing, not before starting. But pulling it first is free and it settles two questions, your entitlement and your funding fee status, that are much easier to resolve before a property and a deadline are involved.

What slows a VA loan down?

Documents arriving late from the borrower, appraisal scheduling in markets with few appraisers, property condition issues requiring repairs, and title problems. The VA itself is rarely the bottleneck, despite the reputation.

Start with the part that costs nothing

A Certificate of Eligibility takes a few minutes and settles your entitlement and your funding fee exemption before either can complicate anything. 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

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