The Complete Guide to the Types of VA Loans

If you’re an eligible veteran, active-duty service member, or surviving spouse, VA loans are still the single most powerful home financing tool in the country. No down payment. No private mortgage insurance (PMI). Competitive rates that beat conventional loans more often than not. And, in many cases, easier qualification.

But “VA loan” isn’t just one product—it’s a family of programs designed to help you buy, refinance, renovate, or even build a home. Whether you’re purchasing your first place, lowering your current rate, or tapping into your home equity, the Department of Veterans Affairs has an option that might fit.

This guide breaks down the different types of VA loans, who qualifies, how each works, and why working with a mortgage broker who understands the VA program can save you serious time and money.

How VA Loans Work

The VA itself doesn’t lend you money. Banks, credit unions, and mortgage brokers do. The VA guarantees part of the loan, reducing the risk for the lender. That guarantee is why VA loans don’t require a down payment and often come with lower rates.

If you stop making payments and the home goes into foreclosure, the VA steps in to cover some (or all) of the lender’s losses. That safety net allows lenders to offer terms that are usually better than conventional or even FHA loans.

Why VA Loans Are a Game-Changer

1. Zero Down Payment – You can finance 100% of your home’s purchase price if your lender agrees. That’s not just for starter homes—jumbo VA loans can also have no down payment.

2. No PMI – On a conventional loan with less than 20% down, PMI can cost hundreds per month. VA loans replace PMI with a one-time funding fee (and in some cases, no fee at all).

3. Flexible Credit and Income Guidelines – While lenders still have standards, VA loans often allow higher debt-to-income ratios and more leniency for past credit challenges.

4. Competitive Interest Rates – On average, 30-year VA fixed rates run about 0.375% to 0.5% lower than comparable conventional loans—saving thousands over the life of the loan. Just make sure you're paying no discount points! 

The Types of VA Loans

1. VA Purchase Loan

This is the most common VA loan and the go-to option for eligible buyers purchasing a primary residence. It allows you to finance up to 100% of the home’s purchase price, often with a lower interest rate than conventional financing and no PMI.

• Property flexibility: Buy a single-family home, a VA-approved condo, or a multi-unit property (up to 4 units) if you plan to live in one unit.

• Customizable terms: Choose from fixed- or adjustable-rate options to fit your financial goals.

• No maximum loan limit with full entitlement: Your purchasing power is determined by your income, credit, and residual income.

For a deeper look at VA eligibility, benefits, and strategies, visit our VA loan resource center.

2. VA Jumbo Loan

VA jumbo loans are designed for higher-priced homes that exceed the standard conforming loan limit in your area. They work just like regular VA loans but can cover significantly larger amounts, and you still get the same competitive VA interest rates regardless of loan size—so unlike conventional mortgages where jumbo rates often run higher, VA jumbo rates are just as low as they would be on a $400,000 loan.

• Expanded purchasing power: Ideal for buyers in expensive housing markets or purchasing luxury properties.

• Flexible down payment: Some lenders require a small down payment; others offer zero down depending on credit and financial strength.

• Full entitlement advantage: The Blue Water Navy Vietnam Veterans Act removed VA loan limits for eligible veterans with full entitlement, enabling multi-million-dollar purchases without a down payment.

3. VA Renovation Loan

The VA renovation loan combines home purchase or refinance financing with funds for home improvements—all in one mortgage.

• Purchase + improve: Buy a property in need of repairs and finance the renovation costs.

• Refinance + improve: Enhance your current home without needing a separate construction loan.

• Wide range of projects: Covers anything from minor updates to major structural repairs, as long as the improvements meet VA property standards.

4. Native American Direct Loan (NADL)

The NADL program helps eligible Native American veterans and their spouses buy, build, or improve homes on federal trust land.

• Direct VA lending: One of the only VA programs where the VA itself is the lender.

• No down payment or PMI: Offers the same zero-down, no-PMI advantage as standard VA loans.

• Favorable terms: Fixed rates that are often lower than prevailing market rates.

5. VA Interest Rate Reduction Refinance Loan (IRRRL)

Also known as the VA Streamline Refinance, the IRRRL is built for speed and simplicity, allowing you to lower your rate or switch from an ARM to a fixed rate with minimal documentation.

• Quick turnaround: Many close in weeks, sometimes days.

• No appraisal or income docs: In most cases, you won’t need to requalify.

• Cost efficiency: Lower fees than a standard refinance.

For more on process and eligibility, read our VA IRRRL guide.

Example: In August 2025, one of our veteran clients in Austin refinanced an $800,000 VA loan from 2024. We closed in 10 days, cut his rate from Six and six hundred twenty-five thousandths percent to Five and six hundred twenty-five thousandths percent, and waived the VA funding fee due to his service-connected disability—saving thousands over the life of the loan.

6. VA Cash-Out Refinance

A VA cash-out refinance lets you replace your current mortgage with a new one while tapping into your home equity.

• Equity access: Borrow up to 100% of your home’s value with some lenders.

• Versatile use: Pay off debt, fund home renovations, cover education costs, or boost investments.

• Open eligibility: Available to qualified veterans even if your current loan isn’t VA-backed.

VA Loan Eligibility

To qualify for a VA loan, you must meet at least one of the following:

• Active-duty, National Guard, or Reserve service with required minimum service time

• Veteran who meets length-of-service requirements

• Surviving spouse of a service member who died in service or from a service-connected disability

You’ll also need to meet your lender’s credit, income, and property requirements. For strategies on getting the most from your VA benefits, see our guide on maximizing your VA disability benefits.

The VA Funding Fee

Instead of monthly PMI, VA loans have a one-time funding fee (unless you’re exempt due to a service-connected disability). Read our complete articles on funding fees and VA disability benefits when buying or refinancing a home to get all the details.

VA Funding Fee Rates

You can pay this fee upfront or roll it into your loan amount. Even with the fee, VA loans often cost less over time than conventional loans with PMI.

Why Veterans Choose LendFriend

At LendFriend, we’ve closed hundreds of VA loans for veterans and active-duty service members nationwide. We know the ins and outs of every VA program—and more importantly, how to structure your deal so you save money.

Unlike many big-name lenders, we don’t bury you in discount points to advertise a “low rate” that isn’t actually low. We deliver great rates without the smoke and mirrors, plus white-glove service from start to finish. Every VA borrower works directly with our co-founders, Eric and Michael, who deeply respect your service and are committed to honoring it with transparent pricing and a smooth closing experience.

FAQs

Do VA loans require a down payment?
No—unless your lender requires one for a jumbo loan.

Can I use a VA loan for an investment property?
Yes, but only if you live in one of the units (up to a 4-unit property).

What’s the VA loan limit?
The VA doesn’t set a hard cap, but lenders do. Your income, credit, and entitlement determine your maximum.

The Bottom Line: VA Loans Are An Amazing Option For Veterans

VA loans aren’t just another mortgage option—they’re a financial advantage you’ve earned. Whether you’re buying your first home, refinancing for a better rate, or pulling equity for life’s big expenses, there’s likely a VA program that fits your needs.

And because not all lenders are created equal, working with a mortgage broker who specializes in VA loans means you can shop dozens of lenders, lock in competitive rates, and close faster—without paying unnecessary fees.