The VA home loan is one of the strongest benefits you earned, and it is also one of the most misunderstood. I talk with veterans every month who assumed they had used up their benefit, did not know they were exempt from the funding fee, or thought a VA offer could not compete. This guide explains how the program actually works, using VA's own rules, with notes for buyers around the military communities in North Carolina, South Carolina, and Georgia.
What is a VA loan and who is eligible?
Short answer: a VA loan is a mortgage from a private lender that the Department of Veterans Affairs partly guarantees. Eligible veterans, active-duty service members, National Guard and Reserve members, and certain surviving spouses can use it to buy a primary residence, usually with $0 down and no monthly mortgage insurance.
Because VA guarantees part of the loan, the lender takes less risk, and that is what makes the $0 down and no-PMI structure possible. VA does not lend the money or set your rate. Lenders do, which is why rates and fees vary from one lender to the next.
Eligibility depends on your service: how long you served, when, and in what status, plus your discharge character. VA publishes the minimum service requirements on its eligibility page, and your Certificate of Eligibility is what confirms it for a lender. Certain surviving spouses qualify too, including many whose spouse died in service or from a service-connected disability.
Key features, straight from VA:
- No down payment as long as the price is not higher than the appraised value
- No private mortgage insurance or FHA-style mortgage insurance premiums
- No prepayment penalty
- Sellers can pay closing costs, with seller concessions limited to 4% of the home's reasonable value
- On a purchase, the only cost you can finance into the loan is the funding fee
How do you get a VA Certificate of Eligibility (COE)?
Short answer: the fastest path is usually through your lender, who can request your COE electronically through VA's system, often in minutes. You can also request it yourself on VA.gov or with VA Form 26-1880.
The COE shows your entitlement and whether any of it is currently charged to an existing VA loan. It also shows whether you are exempt from the funding fee, which is one of the first things I check. Documents that help if the automated request needs backup:
- Veterans: your DD214
- Active duty, or Guard and Reserve members never activated: a statement of service signed by your commander, adjutant, or personnel officer
- Activated Guard and Reserve: your DD214 or other discharge documents
- Discharged Guard or Reserve, never activated: retirement points statement and proof of your character of service
- Surviving spouses: the veteran's DD214 if available, plus VA Form 26-1817 if you receive DIC, or the DIC application, marriage license, and death certificate if you do not
- Anyone with a disability rating: your VA award letter, which supports the funding fee exemption
If the COE comes back with a condition you do not recognize, such as a prior loan still charged against your entitlement, that is fixable in many cases. It is much easier to sort out before you are under contract.
How does VA entitlement work?
Short answer: entitlement is the amount VA guarantees to your lender. With full entitlement, VA says you have no loan limit, only what you qualify for. With partial entitlement, your remaining amount and the county loan limit decide how much you can borrow with $0 down.
Basic and bonus entitlement
Your COE lists basic entitlement. If it shows $36,000, VA explains that you have full entitlement. That $36,000 is not what you can borrow. It is the most VA will pay the lender on a loan of $144,000 or less if the loan goes bad. On loans above $144,000, VA guarantees up to 25% of the loan amount through what it calls bonus entitlement.
Full entitlement means no VA loan limit
If you have never used your benefit, or it has been fully restored, VA does not cap the loan amount. You still need to qualify on credit, income, debts, and residual income, and the loan cannot exceed the lower of the price or the appraised value. This is why VA can work above the $832,750 conforming limit in higher-priced areas like parts of the Charleston coast.
Partial entitlement and the county limit
If you still have a VA loan open, or used entitlement that was not restored, VA's formula uses the county's one-unit conforming limit. Here is VA's method applied to a 2026 county in our area where the limit is $832,750:
- Multiply the county limit by 25%: $832,750 x 0.25 = $208,187.50.
- Subtract the entitlement already charged on your COE. If $50,000 is charged, $208,187.50 minus $50,000 leaves $158,187.50.
- Multiply by 4 to estimate the $0 down maximum most lenders will use: $158,187.50 x 4 = $632,750.
Above that amount, most lenders ask for a down payment so that entitlement plus down payment covers 25% of the loan. It is still often a much smaller down payment than conventional would require.
What is the VA funding fee in 2026, and who is exempt?
Short answer: for most first-time VA purchases with less than 5% down, the funding fee is 2.15% of the loan amount. It drops with a larger down payment, is higher for subsequent use with less than 5% down, can be financed, and is waived for veterans receiving VA disability compensation and a few other groups.
VA's current chart took effect April 7, 2023, and it is the chart in use in 2026. The fee is a percentage of the loan amount, not the price.
| Loan type | First use | After first use |
|---|---|---|
| Purchase, less than 5% down | 2.15% | 3.3% |
| Purchase, 5% or more down | 1.5% | 1.5% |
| Purchase, 10% or more down | 1.25% | 1.25% |
| Cash-out refinance | 2.15% | 3.3% |
| IRRRL (streamline refinance) | 0.5% | 0.5% |
| Loan assumption | 0.5% | 0.5% |
Example using VA's own numbers: on a first-use purchase of a $200,000 home with $10,000 down (5%), the fee is 1.5% of the $190,000 loan, or $2,850. With $0 down on a $300,000 loan, 2.15% would be $6,450, which most buyers finance into the loan.
Funding fee exemptions
According to VA, you do not pay the funding fee if any of these apply:
- You receive VA compensation for a service-connected disability
- You are eligible for that compensation but receive retirement or active-duty pay instead
- You receive Dependency and Indemnity Compensation as a surviving spouse
- You are a service member with a proposed or memorandum rating, issued before closing, saying you are eligible for compensation based on a pre-discharge claim
- You are on active duty and provide evidence of a Purple Heart on or before closing
Timing matters. If your disability compensation is later awarded with an effective date before your closing, VA says you may be eligible for a refund. A proposed or memorandum rating issued after closing does not qualify for a refund. If you have a claim pending, tell me early so we can plan the closing date around it.
What are the VA occupancy rules?
Short answer: a VA purchase loan is for a home you will live in. VA generally treats moving in within 60 days of closing as reasonable, and it has specific allowances for active-duty borrowers, including occupancy by a spouse.
- Primary residence only. VA does not finance vacation homes or pure investment properties. You can buy a 2 to 4 unit property if you live in one of the units.
- Reasonable time. VA's Lender's Handbook describes occupancy within 60 days as generally reasonable. A later date can be acceptable when you certify a specific move-in date tied to a particular future event, such as retirement. More than 12 months after closing generally is not.
- Active duty. If you cannot move in yourself because of your duty assignment, occupancy by your spouse, or in some cases a dependent child, can satisfy the requirement with the right certification. VA also treats deployment from a permanent duty station as temporary duty.
- PCS moves later. Occupancy is judged at closing. If you move in as intended and later receive orders, you can generally keep the home and rent it out. That is how many military families end up with a rental property and a second VA loan.
Your lender confirms how occupancy applies to your orders and family situation, so bring your orders and timeline to the first conversation.
How does the VA appraisal work, and what are MPRs?
Short answer: a VA-assigned appraiser estimates the home's value and checks it against VA's minimum property requirements (MPRs), which are meant to make sure the home is safe, structurally sound, and sanitary. The loan cannot exceed the lower of the price or the appraised value.
Value and the Notice of Value
VA assigns the appraiser, not the lender, and the result is issued as a Notice of Value. If the appraisal comes in below the contract price, VA's own example is clear: on a $400,000 contract with a $375,000 appraisal, the loan is capped at $375,000. At that point you can renegotiate the price, pay the difference in cash, request a reconsideration of value with better comparable sales, or walk away. VA requires the purchase contract to include language that lets you cancel without losing your earnest money if the price is above VA's reasonable value, which your agent and attorney can point out.
Minimum property requirements
MPRs are not a home inspection. They focus on health and safety items. Common flags include:
- Roofs near the end of their life or active leaks
- Peeling paint on homes built before 1978, because of lead-based paint rules
- Missing handrails, exposed wiring, or unsafe electrical panels
- Heating systems that do not work, or no safe water supply
- Wood-destroying insect damage (a wood-destroying insect report is common in our humid Southeast climate)
- Crawl space moisture or drainage problems
Repairs usually have to be done before closing, and the seller often handles them. I still recommend a full home inspection, because the appraiser is not looking at everything you will care about as the owner.
Can you use a VA loan more than once?
Short answer: yes. The benefit is reusable. You can have entitlement restored after selling and paying off a VA loan, and you may be able to buy again with remaining entitlement while your first VA loan is still open.
VA lists three ways to restore entitlement you used:
- You sold the home and paid the prior VA loan in full.
- A qualified veteran buyer assumes your loan and substitutes their own entitlement for yours.
- You paid the prior loan in full but kept the home. This one-time restoration can only be used once; after that, you generally have to dispose of all VA-financed homes before restoring again.
If none of those apply, you may still have remaining entitlement, figured with the county-limit formula in the entitlement section above. On a second use with less than 5% down, the funding fee is 3.3% unless you are exempt, so putting 5% down can save meaningful money if you have it.
One caution on assumptions: if someone who is not a veteran assumes your VA loan, your entitlement stays tied to that loan until it is paid off.
VA vs. FHA, conventional, and state assistance
Short answer: if you are eligible, VA is almost always worth pricing first because of $0 down and no monthly mortgage insurance. Buyers putting 20% or more down, or buying a second home, may find conventional competitive.
- Residual income. VA looks at how much money is left each month after your housing payment, debts, and estimated living costs by family size and region. That lets VA approve some borrowers whose debt ratio looks high on paper, and it protects you from being stretched.
- FHA. FHA requires 3.5% down plus upfront and annual mortgage insurance. The Chenoa Fund, the down payment assistance I can place, pairs only with FHA, but for most eligible veterans VA still costs less.
- Conventional. Conventional has no funding fee, and with 20% down there is no mortgage insurance. If you are not exempt from the funding fee and have a large down payment, compare both.
- State programs. NCHFA's NC 1st Home Advantage Down Payment includes military veterans who meet its criteria, Georgia's DCA offers Peach Select for qualified veterans, and SC Housing's Palmetto Home Advantage works with VA loans. With VA already at $0 down, assistance usually covers closing costs. These programs are offered only through participating lenders, so I confirm whether one of my wholesale lenders participates before recommending one. See North Carolina, South Carolina, and Georgia for details.
The program compare tool lines up VA against FHA and conventional for the same home, including cash to close.
Buying near military bases in NC, SC, and GA
Short answer: all three states have large military communities, and each area has its own mix of flood zones, insurance costs, county loan limits, and tax rules. The VA benefit works the same everywhere, but the local numbers do not.
North Carolina
Fort Bragg near Fayetteville, Camp Lejeune near Jacksonville, Seymour Johnson Air Force Base in Goldsboro, and Marine Corps Air Station Cherry Point in Havelock anchor North Carolina's military market. Coastal homes near Camp Lejeune and Cherry Point often need flood and wind coverage priced in early. I also help buyers in Wilmington, Raleigh, and across the state.
South Carolina
Joint Base Charleston serves buyers in North Charleston, Summerville, and Charleston, where my office is. Fort Jackson is in Columbia, Shaw Air Force Base is in Sumter, and the Beaufort area has Marine Corps Air Station Beaufort and Parris Island. South Carolina taxes a primary residence at a 4% assessment ratio instead of 6% once you apply, and state law has specific provisions for active-duty members with permanent orders in South Carolina. Check with the county assessor so your escrow is set correctly.
Georgia
Fort Benning serves Columbus, Fort Gordon serves Augusta, and Fort Stewart and Hunter Army Airfield are near Savannah. Robins Air Force Base is south of Macon, with Moody Air Force Base near Valdosta and Naval Submarine Base Kings Bay on the coast. Georgia buyers usually pay the state intangible recording tax on the mortgage, and VA lists state and local taxes among the closing costs a buyer and seller can negotiate.
Buying on PCS orders from out of state? The relocation guide covers attorney closings, taxes, and flood insurance by state, and most of my VA buyers work with me remotely until they arrive.
VA buyer checklist
Short answer: get your COE and funding fee status confirmed first, then get pre-approved with residual income calculated, so your offer is as strong as any conventional buyer's.
- Request your COE through your lender and confirm funding fee status.
- Gather your DD-214 or statement of service, recent pay stubs or LES, two years of W-2s, and two months of bank statements.
- Bring your VA award letter if you receive disability compensation.
- Get a full pre-approval that includes residual income, and run your payment with the payment calculator.
- Ask your agent to explain VA terms to the listing agent, including who pays which costs and the 4% concession limit.
- Order a home inspection in addition to the VA appraisal.
- Check flood zones and get insurance quotes before your due diligence period ends.
- Review your Closing Disclosure at least three business days before closing, and close with your local attorney.
Want the program-level summary? See VA loans in NC, SC, and GA. Already own with a VA loan and wondering about a lower rate? The refinance guide covers the VA IRRRL and cash-out options.