Casa Academy

Reviewed by Casa Academy and updated July 29, 2026 using the current DBPR checklist and Pearson VUE scheduling guidance.

VA Loan

A VA loan is a mortgage guaranteed by the U.S. Department of Veterans Affairs for eligible active-duty service members, veterans, and certain surviving spouses, often featuring no down payment, no private mortgage insurance, and competitive interest rates.

Exam context

VA guarantee enables zero down without PMI. COE proves entitlement. Funding fee replaces insurance on most loans. MPR appraisal standards apply.

Eligibility and entitlement

Borrowers obtain a Certificate of Eligibility (COE) documenting available entitlement. Entitlement caps the amount VA will guarantee if the lender forecloses, enabling high loan-to-value ratios. Subsequent use may involve reduced entitlement or funding fee adjustments. Occupancy must be primary residence within a reasonable move-in period.

Property and closing requirements

VA appraisals include a Minimum Property Requirements review for safety and habitability. Sellers may pay certain closing costs but not the veteran funding fee. Agents should understand that VA loans are widely accepted but may require minor repairs before closing. The funding fee funds the program and varies by service history and down payment amount.

Examples

  • First use purchase

    A veteran with full entitlement buys a $350,000 home with no down payment. The lender originates a VA-guaranteed note; the veteran pays a first-use funding fee that may be financed into the loan.

  • MPR repair

    A VA appraiser flags peeling exterior paint and a broken handrail. The seller completes repairs before guaranty approval and closing.

Keep studying

Practice va loan questionsEnroll in pre-licensing

Related terms

  • FHA loansFHA mortgage insurance vs VA funding fee.
  • USDA loanAnother zero-down government program with different eligibility.

Related resources

Sources