What will a VA payment look like?

Since the Blue Water Navy Vietnam Veterans Act took effect on 1 January 2020, a veteran with full entitlement has no VA loan limit and needs no down payment at any loan amount. VA's own words: “You don't have a loan limit (as long as you can afford the loan amount and the property appraisal supports the purchase price of the home).”

You have full entitlement if you have never used the benefit; or you repaid a previous VA loan in full and sold the property; or you had a foreclosure or short sale and repaid VA in full. A veteran who repaid a VA loan but kept the house can restore entitlement, once.

What people mean when they say “the VA loan limit” is the figure that comes back into the calculation when entitlement is partial, when a VA loan is still outstanding, which is the ordinary situation for someone who kept a house on a move and wants to buy again.

VA guarantees 25% of a loan. A lender wants that 25% covered by entitlement, by the veteran's equity, or by the two together. With full entitlement the guaranty is uncapped, so no equity is needed. With partial entitlement the guaranty is capped, and the gap is closed with cash.

VA's own published example: a veteran with $50,000 of entitlement already used, buying in a county with a $900,000 one-unit limit. Maximum guaranty is $225,000; less the $50,000 charged leaves $175,000 of entitlement available; multiplied by four, that supports a $700,000 loan with no money down. Above $700,000 a down payment starts, at 25 cents on every dollar of the excess: at $800,000 the down payment is $25,000, because $800,000 × 25% is $200,000 and $175,000 of that is already covered by entitlement.

Worth knowing where that arithmetic comes from, because VA does not publish it. What VA publishes is the zero-down maximum. The statute, 38 U.S.C. 3703(a)(1), caps the guaranty at 25% of the loan; it does not require the guaranty to be that large. The 25% coverage test is a lender and secondary-market requirement, stated in VA's own Buyer's Guide as 25% of “the appraised value or sales price of the property, whichever is less.” Because the down payment counts toward that coverage alongside entitlement, the gap is the plain difference, not a larger figure. A lender may compute it slightly differently, so treat this as the standard case rather than a universal rule.

Two details people get backwards. First, VA uses the one-unit conforming limit even when the property is a duplex, triplex or fourplex, VA states this explicitly. Second, entitlement charged is not the balance of your old loan; it is roughly a quarter of what that loan was, and the exact figure is on your COE in the “Prior Loans Charged to Entitlement” column.

Basic entitlement of $36,000 covers 25% of $144,000. At or below $144,000 the county calculation never bites, 38 U.S.C. 3703(a)(1)(A) governs instead, (a)(1)(B) is the $36,000 maximum-entitlement figure, not the table, and the guaranty runs on a size-banded table: 50% of a loan up to $45,000, $22,500 between $45,001 and $56,250, and the lesser of $36,000 or 40% above that. This is not, however, a way around having no entitlement. VA's own Maximum Guaranty Calculation examples put it flatly: a veteran who used $36,000 on a prior loan that has not been restored, seeking a $144,000 loan, “cannot use his/her home loan benefit to guaranty the loan without obtaining restoration of entitlement.” No entitlement means no VA loan at any size, not a VA loan with a down payment.

Sources: VA.gov loan limits and eligibility pages; the entitlement example above is VA's own. The county figures are the 2026 FHFA conforming loan limits, which VA adopts.

The last column is what full bonus entitlement supports with no money down in that county. A veteran with full entitlement is not capped by it at all.

VA charges no monthly mortgage insurance. Instead there is a one-time funding fee, which most borrowers finance. It is what keeps the programme running without a premium on every payment.

Source: VA.gov, rates effective 7 April 2023 and current as of September 2026. Note that the rates codified in 38 CFR 36.4313 are the older pre-2020 figures, the regulation has not been updated to match the statute, so the CFR percentages should not be cited.

The 5% down cliff is worth seeing. On a subsequent use the fee falls from 3.30% to 1.50% at 5% down, on a $500,000 loan that is $9,000 saved for $25,000 of cash. It is one of the few places in mortgage lending where a down payment pays for itself that quickly.

The fee is exempt for a veteran receiving VA compensation for a service-connected disability; one entitled to compensation but receiving retirement or active-duty pay instead; a surviving spouse receiving Dependency and Indemnity Compensation; a service member with a proposed or memorandum rating before closing; and an active-duty Purple Heart recipient with evidence provided by closing.

Where the fee sits. It is computed on the base loan amount, there is no fee charged on the fee, and when financed it is added on top. 38 CFR 36.4313(e)(1)(v) allows this “without regard to the reasonable value of the property or the computed maximum loan amount.” So on a purchase the note amount can exceed the appraised value for that reason alone and the loan is still within the rules. A cash-out refinance works the opposite way, there the fee has to fit inside the 100% ceiling. That contrast catches people out.

Every other programme asks what proportion of your income is spoken for. VA also asks what is actually left. After the mortgage payment, other debts, taxes withheld, and an allowance for maintenance and utilities, a specific number of dollars has to remain, varying by region, family size and loan size.

It is why a VA file often works where a conventional one does not, and it is why a high debt-to-income ratio is far less fatal on a VA loan than elsewhere.

Source: 38 CFR 36.4340(e), reproduced in full. The maintenance and utilities allowance of $0.14 per square foot comes from VA's Lenders Handbook rather than the regulation; the regulation itself asks only for a realistic estimate. A reduction of at least 5% applies where there is clear indication of continuing benefit from facilities on a nearby military base.

VA's guideline is 41%. Exceeding it does not fail the loan. Under 38 CFR 36.4340(c) a ratio above 41% needs either a written justification signed at a supervisory level citing compensating factors, or residual income exceeding the required figure by at least 20%, in which case, in the regulation's own words, “the second level review and statement of justification are not required.”

That is a disjunction, not a stack. The 20% residual cushion is what lets a lender skip the paperwork, not an extra hurdle on top of it. This calculator tests the cushion, because it is the half a calculator can measure.

VA caps interested party concessions at 4% of the reasonable value, but the definition of a concession is narrow, and this is where VA is more generous than it first appears. The 4% covers the seller paying your funding fee, prepaid items, non-market discount points, gifts, temporary buydown points, and payoff of your debts or judgments.

It does not cover ordinary closing costs. Title insurance, title examination, the appraisal, the origination fee and normal discount points can all be paid by the seller without touching the 4% at all. So a seller can contribute substantially more than 4% of the price in total.

A VA purchase loan requires the veteran to occupy the property as a home, or to certify an intention to move in within a reasonable time after closing, VA's Lenders Handbook treats sixty days as the working standard. A spouse may satisfy occupancy for a service member on active duty, and in some cases a dependent child may.

One- to four-unit properties are eligible when the veteran occupies one of the units. Remember that the entitlement calculation still uses the one-unit county limit.

VA loans are assumable, which no other major programme allows, and in a higher-rate market that is a genuine asset attached to the house. But there is a catch worth knowing before you need it: if a non-veteran assumes the loan, your entitlement stays tied to that property and is not released. Only when an eligible veteran assumes the loan and executes a substitution of entitlement does yours come back.

The annual percentage rate is the rate that discounts every payment back to the amount financed. Counted as prepaid finance charges here: origination and discount points, lender fees, prepaid per-diem interest, and the VA funding fee whether financed or paid at closing. Excluded, as 12 CFR 1026.4(c)(7) permits when bona fide and reasonable: title examination and insurance, escrow and settlement fees, document preparation, notary, appraisal, credit report, survey, and recording fees and transfer taxes.

Because there is no monthly mortgage insurance, a VA APR sits closer to its note rate than an FHA APR does, the funding fee is the only real gap, and on an exempt borrower there is barely any gap at all.

Every closing-cost figure here is an estimate. It is not a Loan Estimate, a Closing Disclosure, a fee worksheet or a quote. Lender fees, title and escrow charges, settlement and recording fees and prepaid items vary by lender, by settlement agent, by county and state, and by the day you close. Your actual figures arrive on the Loan Estimate within three business days of a completed application, and are finalized on the Closing Disclosure at least three business days before closing.

The estimate excludes transfer, documentary and recording taxes, which are substantial in some states; HOA transfer and document fees; inspections; home warranty; survey; flood or earthquake premiums; rate lock extensions; and prorations between buyer and seller. VA additionally bars certain fees from being charged to the veteran at all, and limits the lender's origination charge, which is why a VA fee sheet often looks different from a conventional one.