VA loan benefits: zero down, no PMI, and the funding fee (2.15-3.3% for first use, waived for disabled veterans). How VA compares to conventional and FHA.
The VA home loan program, administered by the U.S. Department of Veterans Affairs, is one of the most powerful homebuying benefits available to military service members, veterans, and eligible surviving spouses. Unlike any other major mortgage program, the VA loan offers 0% down payment with no monthly mortgage insurance (PMI or MIP), which saves borrowers hundreds of dollars per month compared to conventional or FHA loans.
Eligibility is determined by the VA based on length of service. Active-duty members qualify after 90 continuous days during wartime or 181 days during peacetime. Veterans qualify with 6 years in the Selected Reserve or National Guard. Surviving spouses of service members who died in the line of duty or from a service-connected disability are also eligible. The VA does not set a minimum credit score, but most VA lenders require 580-620.
| Eligibility Category | Service Requirement |
|---|---|
| Active duty (wartime) | 90 continuous days |
| Active duty (peacetime) | 181 continuous days |
| Reserves / National Guard | 6 years of service |
| Surviving spouse | Died in line of duty or service-connected disability |
The VA funding fee is a one-time charge that helps offset the cost of the loan program to taxpayers. The fee is a percentage of the loan amount and varies based on whether it is your first use of the benefit, the down payment amount, and whether you are a reservist or active duty. For first-time use with 0% down, the funding fee is 2.15% of the loan amount. For subsequent use with 0% down, it rises to 3.3%. The fee decreases with higher down payments:
| Use | 0% Down | 5%+ Down | 10%+ Down |
|---|---|---|---|
| First-time use (active duty) | 2.15% | 1.50% | 1.25% |
| First-time use (reserves) | 2.40% | 1.75% | 1.50% |
| Subsequent use | 3.30% | 1.50% | 1.25% |
Veterans receiving VA disability compensation are exempt from the funding fee entirely. Surviving spouses of veterans who died in service or from a service-connected disability are also exempt. The funding fee can be rolled into the loan amount rather than paid upfront, which preserves the zero-down-payment benefit. On a $300,000 loan with 2.15% funding fee, the fee is $6,450, which can be added to the loan balance, making the total loan $306,450.
The absence of PMI is the VA loan's biggest financial advantage. On a conventional loan with 5% down and a 620-credit score, PMI typically costs 0.5-1.0% of the loan balance per year. On a $300,000 loan, that is $1,500-$3,000 per year, or $125-$250 per month. On an FHA loan with 3.5% down, the annual MIP is 0.85% — $2,550 per year or $212.50 per month. The VA loan has zero monthly mortgage insurance, saving $125-$250 per month compared to conventional and roughly $212 per month compared to FHA.
Over 5 years of homeownership, the VA loan saves $7,500-$15,000 in PMI compared to conventional and $12,750 compared to FHA. Even after adding the funding fee (which can be rolled into the loan), the VA loan is the lowest-cost option for eligible borrowers in most scenarios. The Metriova VA loan calculator compares the total cost of a VA loan versus conventional and FHA, accounting for the funding fee, PMI/MIP, and interest rate differences, so you can see the real dollar savings.
VA Loan Calculator — 0% Down & Funding Fee
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