Are you eligible for a VA loan but unsure where to begin? Whether you’re a first-time homebuyer, a seasoned real estate investor, or a professional helping military clients, understanding the VA loan process from start to finish is crucial. The VA loan is one of the most powerful tools available to military service members, veterans, and qualifying spouses—but understand the process can be overwhelming without proper guidance.
This comprehensive guide will walk you through each step of the VA loan process—from obtaining your Certificate of Eligibility (COE) to closing on your new home—with practical tips, financial insights, and helpful tools along the way.
Overview: Why Choose a VA Loan?
The VA loan is a mortgage program backed by the U.S. Department of Veterans Affairs. It was created to help active-duty service members, veterans, and certain military spouses purchase homes with favorable loan terms and fewer barriers to entry.
Key VA Loan Benefits:
- Zero down payment (most buyers qualify without one)
- No private mortgage insurance (PMI)
- Competitive interest rates
- Flexible credit requirements
- No loan limits with full entitlement (as of 2020)
Learn about VA loan eligibility and benefits
Step-by-Step: VA Loan Process from COE to Closing
The VA loan process may seem complex, but it’s manageable when broken into actionable steps. Below is a chronological guide that simplifies each stage of the journey.
Step 1: Obtain Your Certificate of Eligibility (COE)
The COE is the official document verifying your eligibility for a VA-backed loan. Lenders require this to proceed with your loan application.
How to get your COE:
- Online via VA eBenefits portal
- Through your VA-approved lender
- By mail using VA Form 26-1880
What you’ll need:
- DD214 (for veterans)
- Statement of service (for active-duty members)
- Proof of service history (for Reservists/National Guard)
Tip: Most lenders can access your COE within minutes if your records are Step 2: Get Preapproved by a VA Lender
Preapproval is a lender’s conditional agreement to loan you a specific amount. It shows sellers you’re a serious buyer and helps define your home budget.
Documents needed for preapproval:
- COE
- Pay stubs (past 30 days)
- W-2s or tax returns (past 2 years)
- Bank statements
- Credit report authorization
VA Guidelines to keep in mind:
- Credit score: No VA-mandated minimum, but most lenders require 620+
- Debt-to-Income (DTI) ratio: Recommended 41% or less
- Residual income: Varies by region and family size (VA requires leftover funds after expenses)
Try this VA loan preapproval calculator to estimate how much you can borrow.
Step 2: Get Preapproved by a VA Lender
Preapproval is a lender’s conditional agreement to loan you a specific amount. It shows sellers you’re a serious buyer and helps define your home budget.
Documents needed for preapproval:
- COE Pay stubs (past 30 days)
- W-2s or tax returns (past 2 years)
- Bank statements
- Credit report authorization
VA Guidelines to keep in mind:
- Credit score: No VA-mandated minimum, but most lenders require 620+
- Debt-to-Income (DTI) ratio: Recommended 41% or less
- Residual income: Varies by region and family size (VA requires leftover funds after expenses)
Try this VA loan preapproval calculator to estimate how much you can borrow.
Step 3: Find a VA-Eligible Home
With preapproval in hand, it’s time to go house hunting. Not every property qualifies for a VA loan, so working with a VA-savvy real estate agent is essential.
Eligible property types:
- Single-family homes
- VA-approved condos
- Multi-unit homes (up to 4 units)
- New constructions (if VA-approved)
- Manufactured homes (with restrictions)
Requirements:
- Property must be your primary residence
- Home must meet Minimum Property Requirements (MPRs) ensuring safety and livability
Search for VA-approved condos
Step 4: Make an Offer and Sign a Purchase Agreement
Once you’ve found the right home:
- Work with your agent to submit a competitive offer
- Include a VA appraisal and financing contingency clause
- Ensure the seller is aware you’re using a VA loan
Include a VA escape clause in the contract, which protects you if the property doesn’t appraise at or above the sale price.
Step 5: Complete the VA Appraisal and Home Inspection
The VA requires an appraisal to ensure the property is worth the agreed price and meets minimum standards. A home inspection is optional but highly recommended for buyer protection.
VA Appraisal Includes:
- Fair market valuation
- Basic safety and livability check (roof, electrical, plumbing, etc.)
Common issues that delay approval:
- Peeling paint (especially lead-based)
- Roof damage
- Non-functioning HVAC systems
- Termite or pest problems
If the home doesn’t pass the VA appraisal, the seller must address the issues, or you may renegotiate the price or walk away.
Step 6: Final Underwriting and Approval
Once the appraisal is approved and documentation is complete, your loan enters final underwriting.
Lenders will:
- Review your financials again
- Confirm title and homeowners insurance
- Finalize interest rate and loan structure
- Issue a Closing Disclosure (CD) at least three days before closing
Double-check your CD for loan terms, closing costs, and cash-to-close.
Step 7: Closing on Your VA Loan
Congratulations—you’re almost there!
At closing, you’ll:
- Sign final documents
- Pay any required closing costs (if not covered by seller/lender)
- Receive keys and take possession of your new home
Average closing costs:
- VA Funding Fee: 0.5% to 3.3% of the loan amount
- Title insurance, escrow, taxes, and recording fees
- Optional prepaid items (insurance, taxes, interest)
Use the VA funding fee calculator to estimate your costs.
Real-World Example
Buyer Profile: First-time homebuyer, Army veteran, credit score 680
Loan Amount: $300,000
Down Payment: $0
Funding Fee: 2.3% (first-time use, no down payment) = $6,900
Monthly Payment: $2,050 (includes taxes & insurance)
Result: Buyer closes with no down payment and minimal out-of-pocket costs—thanks to seller-covered closing expenses.
Tips for Success
Choose VA-experienced professionals – From agents to appraisers
Keep documentation organized – Save all tax and income documents
Maintain financial stability – Don’t open new credit lines before closing
Review all disclosures – Ask questions if anything seems unclear
Plan for extra costs – Home inspection, insurance, moving expenses
Recommended Resources
- VA Loan Home Page
- VA Entitlement and Eligibility Explained
- VA Loan vs. FHA Loan
- VA Loan Limits by County
Conclusion: Take the Next Step with Confidence
Applying for a VA loan doesn’t have to be intimidating. With the right guidance, a clear plan, and trusted professionals, you can make informed decisions that benefit your financial future. From securing your COE to finally closing on your home, every step brings you closer to the American dream of homeownership—earned through your service. Are you eligible for a VA loan but unsure where to begin? Whether you’re a first-time homebuyer, a seasoned real estate investor, or a professional helping military clients, understanding the VA loan process from start to finish is crucial. The VA loan is one of the most powerful tools available to military service members, veterans, and qualifying spouses—but understand the process can be overwhelming without proper guidance.
This comprehensive guide will walk you through each step of the VA loan process—from obtaining your Certificate of Eligibility (COE) to closing on your new home—with practical tips, financial insights, and helpful tools along the way.—earned through your service.