Serving your country in the military can make you eligible for a VA loan, a home financing option that comes with a number of valuable benefits. That’s why we encourage both present and former service members to consider VA loans as they weigh their home financing options. 

VA loans for first-time buyers can potentially save you a lot of money when you purchase a home. When you take out a VA loan, no down payment is required and you can secure competitive rates and terms. But that isn’t where the savings stop. Below is some important information about getting a VA loan as a first-time home buyer.

What Is a VA Loan?

The U.S. Department of Veterans Affairs (VA) offers military veterans and service members (as well as their surviving spouses) special mortgage loans, otherwise known as VA loans. These VA loans for first-time home buyers are secured by the Department of Veterans Affairs, thereby enabling lenders to offer VA loans to first-time home buyers with no down payment and low rates. 

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How Does a VA Loan Work?

Unlike many traditional mortgages, borrowers who are eligible for a first-time home buyer VA loan can get 100% of the financing for the home they choose. Or, if they don’t like the real estate market options, that same funding can go towards a newly built home. 

For veterans who have a service connected disability that requires special access into and inside the home, a VA loan can provide the necessary funds for repairs and remodels. They can even be used to refinance a home at a more favorable interest rate, allowing borrowers to cut down on their payment and save money.

VA loans have the backing from the Department of Veterans Affairs. This means that if the borrower defaults on their loan, the VA will step in and pay the lender a significant portion of the loan amount. Because of this additional security, private lenders are more willing to extend credit to borrowers without requiring a down payment.

Griffin Funding offers the following types of VA loans:

Private lending institutions are the ones who offer the actual loans — not the VA. But because their loans to their home-buying clients are backed by the VA, Griffin Funding can offer far more favorable terms than most civilian clients will ever see.

Benefits of VA Loans for First-Time Home Buyers

One of the biggest barriers to homeownership is the often hefty down payment that first-time home buyers must have when seeking funding. First-time home buyers aren’t entering the process with proceeds from a former home they have already sold. In fact, they could be cash-strapped, even if the veteran and their spouse are working two full-time jobs.

But down payments are not required for qualified applicants seeking VA loans. That is a major hurdle military personnel and veterans can dodge. Below are some additional benefits to take into account when considering a VA home loan as a first-time home buyer: 

  • Less than perfect credit? No problem. Building a decent credit score can take years. One credit ding can throw a wrench into your home-buying plans. Griffin Funding offers flexible qualification requirements and competitive VA loan rates to help veterans, active service members, and their surviving spouses find the homes of their dreams.
  • No need for private mortgage insurance (PMI). Civilian home buyers who provide a down payment of less than 20% typically must purchase PMI. The cost of that added fee can bump your mortgage payment. Luckily, VA loans don’t require private mortgage insurance.
  • Lower interest rates. VA loans typically offer lower interest rates than conventional financing options because they’re backed by the Department of Veterans Affairs. This government guarantee lowers the risk for lenders, which allows them to offer more favorable terms. Over time, a lower rate can translate to significant savings — potentially tens of thousands of dollars in interest over the life of your mortgage.
  • Limited closing costs. The VA limits the types of closing costs veterans can be charged, which helps reduce your upfront expenses. For example, the VA prohibits lenders from charging certain fees that are common with conventional loans, such as attorney fees and brokerage fees.
  • No prepayment penalty. With a VA loan, you’re free to pay off your mortgage ahead of schedule without facing any additional fees or penalties. That means if you decide to make extra payments each month or pay off your loan entirely before the end of the term, you won’t have to deal with a prepayment penalty.
  • Flexible property types. VA loans can be used to purchase a wide range of property types beyond just single-family homes. You can also use them to buy condos in VA-approved developments, multi-unit properties like duplexes, or even certain manufactured homes. This gives you more options to find a property that fits your needs and lifestyle.
  • Funding fee can be financed (or waived). While VA loans don’t require a down payment or PMI, they do come with a one-time VA funding fee, which helps support the program. However, this fee doesn’t have to be paid out of pocket; you can finance it into the total loan amount. In some cases, such as for veterans receiving VA disability compensation, the fee may be waived entirely, making the loan even more affordable. 

How to Get a VA Loan as a First-Time Home Buyer

Here at Griffin Funding, we don’t want our clients to experience any unpleasant surprises during the home-buying process or at closing. We can schedule an in-person or telephone consultation so you can learn more about the application and financing process and get started.

Information that will be considered when you apply for a VA loan as a first-time home buyer include: 

  • Credit score
  • Monthly take-home pay
  • Down payment amount 
  • Your debt-to-income ratio

Once these parameters are established, the experts at Griffin Funding can offer various financing options and provide quotes. The more choices that you have, the better your chances are of making the right financing decision. 

First-Time Home Buyer VA Loan Qualification Requirements

If you are an active-duty military service member, a veteran, or the surviving spouse of a veteran who otherwise qualifies for the loan, you may apply for a VA loan and buy your first home for you and your family. However, this home must be occupied full-time as your primary residence. A VA loan cannot be used to buy a designated investment property, although you can rent out units or rooms in the property as long as it remains your primary residence.

In order to qualify, you also have to apply for and obtain a Certificate of Eligibility (COE). This can often be done quickly by the veteran or service member. There could be some delay in verification for surviving spouses, so factor that timeframe into your home-buying timeline.

Other requirements necessary in order to get approved for a VA loan include:

3 Tips for Getting a VA Loan as a First-Time Home Buyer

Not sure if you are eligible for a VA loan as a first-time home buyer? In that case, the loan professionals at Griffin Funding can offer you a few tips that can help you as a first-time buyer using a VA loan.

Improve Your Credit

Improving your credit is certainly possible, but it can be a slow process. Before you even begin looking at properties on the real estate market, pay off—or at least significantly lower—your outstanding debts. Do some belt-tightening to reduce your monthly expenditures. Seek financial guidance for drawing up a monthly budget — then stick to it!

While the VA and its approved lenders tend to be more lenient when it comes to credit requirements for VA loans, there are still minimum standards that must be met before any loans are approved.

Don’t Take On Additional Debt

Shred those credit card applications that come unsolicited in the mail. Make repairs to older model cars and forgo updating to a newer model. Keep your eye on the prize — a new home for you and your loved ones.

Should You Get Pre-Approved?

By getting pre-approved, you can streamline the process of purchasing a home. Your VA home loan lender can review your financial metrics, employment status, and credit history. If they spot some red flags, you can resolve any potential issues before devoting too much time to house hunting.

Once your application is in order and you are satisfied with your credit score and DTI, you can get pre-approved for a VA home loan. After getting pre-approved, you will get a better idea of how much you can really afford. 

Choose an Experienced VA Lender

Griffin Funding is very experienced when it comes to providing VA loans to first-time home buyers. Our loan originators are intimately familiar with the ins and outs of VA home loans. They can expertly guide you through the loan application process and help you get into the home of your dreams as quickly as possible.

At Griffin Funding, we offer fair loan terms and competitive rates to all borrowers. We are proud to serve the men and women who served this country by providing VA loans at low rates. Make your dream of homeownership come true by reaching out to our team today or getting started online.

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Frequently Asked Questions

How much home can I afford with a VA loan?

If you’re a first-time home buyer using a VA loan, you’ll typically be able to afford more than you would with other loan types. That’s because VA first-time home buyer programs offer highly competitive interest rates and reduced fees that lower the cost of borrowing. However, this isn’t true for everyone.

The amount you can afford depends on your income, debt, credit profile, and other financial factors. Use our VA loan affordability calculator to estimate your potential budget and check out the VA loan calculator to get a better idea of what your monthly payments might look like.

Are there income limits on VA loans for first-time home buyers?

There are no income limits for VA first-time home buyers or anyone using the VA loan program. However, lenders will still evaluate your income and debt-to-income ratio to determine if you can reasonably afford the loan.

How do I choose a VA mortgage lender?

If you’re a first-time home buyer looking for a VA home loan, it’s essential to choose the right lender. Look for a lender who specializes in VA loans and understands the unique needs of veterans and military families. It's important to compare rates, fees, and customer service in order to find the right VA lender for your needs. 

Griffin Funding offers dedicated VA loan support and competitive rates tailored to your situation. We’ve helped service members and veterans across the nation navigate the mortgage process as VA first-time home buyers. Check out our testimonials to see why Griffin Funding is the right lending partner for your next VA loan.

Bill Lyons is the Founder, CEO & President of Griffin Funding. Founded in 2013, Griffin Funding is a national boutique mortgage lender focusing on delivering 5-star service to its clients. Mr. Lyons has 23 years of experience in the mortgage business. Lyons is seen as an industry leader and expert in real estate finance. Lyons has been featured in Forbes, Inc., Wall Street Journal, HousingWire, and more. As a member of the Mortgage Bankers Association, Lyons is able to keep up with important changes in the industry to deliver the most value to Griffin's clients. Under Lyons' leadership, Griffin Funding has made the Inc. 5000 fastest-growing companies list five times in its 11 years in business.