VA Loans: Eligibility, Funding Fee and Condo Approval

What is a VA-backed home loan?

VA says VA direct and VA-backed home loans can help veterans, service members and their survivors buy, build, improve or refinance a home ^[1].

VA also makes clear that the backing does not replace underwriting. To get financing you must meet credit, income and occupancy requirements from both VA and your lender, and you still need the credit and income for the loan amount you want ^[1][3]. That is why two veterans can be treated differently by different lenders.

Global G Home Loans, LLC is a mortgage broker. Tell us about your service and the home you want, and we will tell you which financing options we can work on for your situation.

Who is eligible for a VA loan, and what is the Certificate of Eligibility?

Eligibility depends on service. VA's page gives, for example, that a current service member who has served at least 90 continuous days without a break meets the minimum active-duty service requirement; for veterans the required length of service varies by service period ^[3]. National Guard and Reserve members and some surviving spouses may also qualify depending on their circumstances ^[4].

The Certificate of Eligibility (COE) is the document that confirms to your lender that you qualify for the benefit, and VA describes it as the first step in getting a VA-backed loan ^[4]. You can request a COE online yourself, or ask your lender to submit an online application for you ^[3]. VA notes that a lender may be able to use an online system to get it ^[4].

Can I use a VA loan for a rental or second home?

VA's purchase-loan page states that you will live in the home you are buying with the loan ^[2]. That is an occupancy requirement, so a VA purchase loan is not a tool for buying a rental property or a vacation home. If the home you want is an investment, a different loan type, such as a DSCR loan, is the better question to ask us about.

The same page lists the property types a VA purchase loan can buy: a single-family home of up to four units, a condo in a VA-approved project, a manufactured home or lot, or a new home you build ^[2]. It also states that there is no down payment as long as the sales price is not higher than the home's appraised value ^[2].

What is the VA funding fee?

VA describes the funding fee as a one-time payment that the veteran, service member or survivor pays on a VA-backed or VA direct home loan ^[5]. Most borrowers must pay it, but some are exempt, for example those receiving VA disability compensation or an eligible surviving spouse receiving Dependency and Indemnity Compensation ^[5].

You can pay the fee in full at closing, or include it in the loan and pay it off over time, which VA calls financing ^[5]. VA sets the fee as a percentage of the loan amount and the percentage depends on factors such as the type of loan, whether it is your first use of the benefit, and your down payment ^[5]. We do not publish percentages or dollar amounts here because VA revises its charts. Your loan officer gives you the current figure in your official disclosures.

Why does VA condo approval matter?

VA states you can buy a condo only in a VA-approved project ^[2]. The approval applies to the project, not to you, so a fully eligible veteran can be stopped by a building that is not on VA's approved list.

VA's guide for lenders describes a condo record system: the lender searches for the project, and if no record is found, the lender can create a new record and upload the condominium package for VA review ^[6]. That document is dated March 2020, so the current process may differ. We do not name or rate specific buildings on this site. If your building is not approved, we will look at what options exist for that building, including financing outside the VA program.