Definition
A mortgage guaranteed by the Department of Veterans Affairs for eligible veterans, service members, and some surviving spouses. It allows no down payment and charges no monthly mortgage insurance; most borrowers pay a one-time funding fee instead, which can roll into the loan.
Why it matters
For those who qualify, the VA loan removes the two biggest barriers to buying: years of down-payment saving and the monthly PMI drag. The funding fee is the trade, and it is waived for many disabled veterans.
Example
A veteran buys a $300,000 home with $0 down and no monthly mortgage insurance. A conventional buyer putting 5% down would need $15,000 upfront plus PMI every month until reaching 20% equity; the veteran instead pays a one-time funding fee rolled into the loan.
Put it into practice
Related terms
This definition is educational, not financial, legal, or tax advice. U.S. rules and limits change; verify time-sensitive details with official sources. See our disclaimer.