Most eligible VA home loan borrowers don’t need a down payment.
If you have full VA entitlement and the home appraises at or above the purchase price, you can finance 100% of the price with a VA loan.
Read on to learn more about VA loan requirements, and whether you’ll need to make a down payment for a VA loan.
VA Loan Down Payment Requirements
In most cases, no down payment is required for a VA loan if you have full entitlement and the property’s VA appraisal supports the contract price.
VA entitlement is the amount the Department of Veterans Affairs guarantees on your behalf. With full entitlement, the VA guaranty equals at least 25% of the loan amount, which lets lenders offer 100% financing without private mortgage insurance.
When a Down Payment May Be Required on a VA Loan
You might need to bring cash in a few situations, but the most common is when you only have a partial entitlement.
Partial VA entitlement can happen when part of your VA guaranty is tied up in another property or reduced by a prior default. With partial entitlement, the VA’s backing may be below 25% of your new loan, so lenders can require a down payment to restore adequate coverage.
- If you only have a partial entitlement, either from an existing VA loan or a previous default.
- VA appraisal gap, or an appraised value below the contract price.
- Lender overlays for large balances or a VA jumbo loan.
- You choose to put money down to lower the funding fee or payments.
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Scenario
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Why it can require a down payment
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What you can do
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Partial entitlement
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Remaining guaranty may be less than 25% of the loan amount, requiring a down payment to make up the difference.
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Confirm entitlement and calculate needed equit.; consider selling or substituting entitlement.
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VA appraisal gap
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VA won’t finance above the Notice of Value. Buyers must cover any gap between price and appraised value.
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Renegotiate price, ask for concessions, or bring the gap in cash.
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Lender overlays or a VA jumbo loan
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Some lenders require money down on very large VA loans or impose internal limits beyond VA rules.
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Shop lenders; policies vary widely on jumbo and overlays.
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Borrower‑elected down payment
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This is your prerogative. Making a down payment reduces funding fee and monthly payment, and can help approval in edge cases.
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Compare 0% vs. small‑down payment scenarios to compare lifetime costs.
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Other VA Loan Costs
Unlike conventional and FHA loans, VA loans don’t require private mortgage insurance.
They do, however, require a funding fee. The VA funding fee is a one-time charge that supports the program. It varies by use and down payment: First-time VA loans with less than 5% down typically require 2.15% of the loan amount, but a larger down payment can reduce the fee.
The funding fee can often be rolled into the loan amount rather than paid at closing. Some veterans, including those with service-related disabilities, can have the fee waived.
No mortgage insurance: VA loans do not require private mortgage insurance (PMI), even with 0% down, which can significantly reduce monthly costs compared with low-down conventional loans.
Like other loan types, VA loans come with closing costs. iExpect roughly 2% to 7% of the purchase price for things like appraisal, title, recording, and prepaid items. Seller concessions can offset some costs, but VA loans aren’t zero-cost transactions.
How to Prepare and Qualify for a VA Loan Without a Down Payment
- Confirm entitlement early by requesting your Certificate of Eligibility (COE) through the VA.
- Compare lenders to make sure you won’t be hit with overlays.
- Order the VA appraisal and compare the Notice of Value to your purchase price.
- Budget for VA loan closing costs, reserves, and the VA funding fee, even if it’s rolled into the loan.
- Compare 0% down vs. making a small down payment to see impacts on funding fee, payment, and total interest.
The VA sets program rules, but individual lenders set credit guidelines. There’s no universal VA minimum credit score. Shopping multiple lenders is essential because overlays, rates, and jumbo policies differ.
The Bottom Line
You generally won’t need a down payment for a VA loan if you have full entitlement. If your entitlement is tied up in another loan or you’re getting a VA jumbo loan, you might have to make a down payment. VA loans do require a funding fee at close, but that can generally be rolled into your loan, and some qualifying veterans can have the fee waived.
Frequently Asked Questions About VA Loan Down Payments
Do you need a down payment for a VA loan?
No. With full entitlement and a supportive appraisal, VA loans allow 100% financing and no down payment.
Who qualifies for a VA loan with no down payment?
Eligible veterans, active-duty service members, many National Guard and Reserve members, and some surviving spouses can qualify if they meet service and entitlement requirements.
What is the VA funding fee and how does it affect total costs?
It’s a one-time program fee (based on use and down payment) that can be financed into the loan; a larger down payment generally lowers the fee and monthly costs.
Can you get a VA loan with bad credit or no down payment?
Yes. VA loans emphasize residual income and lender-specific guidelines rather than a hard minimum score, and 0% down is common for eligible borrowers.
How do VA loan down payments compare to FHA and conventional loans?
VA loans allow 0% down and avoid monthly mortgage insurance; FHA requires at least 3.5% down and conventional loans typically start at 3% down with PMI below 20%.
