The Department of Veterans Affairs offers the VA loan program to qualified military members, retired and/or separated veterans, and in some cases family members.

The program is designed to help those who have served in the military purchase affordable housing with reasonable interest rates. Potential VA borrowers who compare the terms, interest rates, and conditions of conventional loans with their VA counterparts will find many advantages.

The first of these is the no-money-down option available to VA borrowers. Unless the lender requires a down payment or the purchase price is more than the VA loan amount allowed for that purchase, a zero down payment option is a very important part of the VA loan package for many.

Because of the VA loan appraisal process–which helps determine the actual loan amount and whether a down payment could be required–the buyer is fully informed of the reasonable market value of the home. Whether that value matches the asking price for the property or not is purely situational, but the borrower won’t go into a purchase agreement without knowing what the VA considers to be the fair value of a give property.

The VA does not set the interest rates on VA home loans; this is something the lender and borrower must negotiate. Some borrowers are eligible for better interest rates because of their credit history, while others may not qualify for the best rates for the same reason. In either case, the VA does require the rates on loans insured through the VA Loan program to be “reasonable and customary” as accepted in that particular housing market.

VA loan Closing costs are comparable with conventional loans of the same type and in some cases could be more affordable. One of the most attractive features of a VA home loan for many buyers is that there is no Mortgage Insurance Premium required with a VA loan–unlike conventional mortgages.

Interested borrowers can take steps to pre-qualify for a VA home loan or learn about getting initial VA loan eligibility which is required for all VA mortgages.