In this explainer

A VA loan is one of the most powerful tools in lending - zero down, no monthly mortgage insurance - but there is one cost buyers always miss: the VA funding fee. Here is how the whole thing works in 2026.

General information, not professional financial, tax, legal, or insurance advice. The Dreamy Leads Research Desk is an editorial and data team, not a licensed advisor.

Chapters

  1. 0:05 What a VA loan is
  2. 0:26 Zero down payment
  3. 0:32 No monthly mortgage insurance
  4. 0:50 The funding fee nobody explains
  5. 1:02 It is higher on later use
  6. 1:10 Who qualifies and how

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Full transcript

What a VA loan is

A VA loan is a mortgage backed by the Department of Veterans Affairs for eligible service members, veterans, and some surviving spouses. The government backing is what makes its standout terms possible. You qualify with a Certificate of Eligibility, or COE, which proves your service entitlement. This is general information, not advice.

Zero down payment

The headline benefit: a VA loan can require no down payment at all for eligible buyers.

No monthly mortgage insurance

Unlike FHA and most low-down conventional loans, a VA loan has no monthly mortgage insurance, which can save a borrower a meaningful amount every month for the life of the loan. That single difference is why VA-eligible buyers should almost always price a VA loan first.

The funding fee nobody explains

Here is the cost buyers miss. In place of mortgage insurance, the VA charges a one-time funding fee of about two point one five percent of the loan on first use.

It is higher on later use

On a later VA loan the funding fee rises to about three point three percent, and a down payment lowers it.

Who qualifies and how

Eligibility runs on service history, not on a special credit score, though lenders set their own minimums. Pull your Certificate of Eligibility, compare a VA loan against FHA and conventional with the funding fee included, and run the real monthly cost. This is general information, not advice. Run your own numbers in our explorer.

Frequently Asked Questions

Do VA loans really require zero down payment?

Yes, for eligible buyers a VA loan can finance up to the county loan limit with no down payment. You still pay closing costs and a one-time VA funding fee, but no down payment is required on the home itself. This is general information, not advice.

What is the VA funding fee in 2026?

The VA funding fee is a one-time charge that replaces monthly mortgage insurance. On a first-use purchase with no down payment it is about 2.15 percent of the loan, rising to about 3.3 percent on later use; a down payment lowers it, and many veterans with a service-connected disability are exempt. The fee can be financed into the loan. This is general information, not advice.

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