How to Buy Your First Home With a VA Loan

Posted on: December 15, 2025

Buying your first home is a big milestone, and for many younger veterans and service members, a VA loan can make that milestone more achievable. VA loans offer no-down-payment financing, flexible credit requirements, and competitive interest rates, which can remove major obstacles for first-time buyers.

If you’re just starting out in your career or still building your financial footing, here’s how to use your VA home loan benefit to confidently buy your first home.

Check your VA home buying eligibility. Start here (Dec 15th, 2025)

VA loan basics every first-time buyer should know

A VA loan is a mortgage backed by the U.S. Department of Veterans Affairs. The VA doesn’t lend the money; instead, approved lenders provide the loan, and the VA guarantees a portion of it. That guarantee gives lenders more confidence, which translates into easier qualification and better terms for you.

You may qualify for a VA loan if you’re:

• A veteran who has served the required length of time
• An active-duty service member
• A National Guard or Reserve member with qualifying service
• A surviving spouse who meets VA criteria

Once eligible, you’ll need a Certificate of Eligibility (COE) to confirm your benefit with lenders. It’s simple to request through the VA or with your lender.

Why younger buyers benefit

VA loans deliver several advantages that can make homeownership more accessible earlier in life. These benefits can significantly reduce upfront costs and lower long-term financial pressure, two common hurdles for younger veterans and service members.

Key advantages include:

• No down payment required: Qualified borrowers can finance 100% of the purchase price, which removes one of the biggest obstacles for first-time buyers who haven’t had years to save.
• No private mortgage insurance (PMI): Unlike conventional and FHA loans, VA loans don’t require ongoing mortgage insurance premiums, even with no down payment. This can save hundreds of dollars per month.
• Competitive interest rates: VA-backed loans typically offer lower rates than many other mortgage types, helping reduce monthly payments and total interest costs over the life of the loan.
• Limited closing costs: The VA restricts the types of fees lenders can charge, which helps keep upfront expenses manageable. Sellers can also contribute toward closing costs within VA guidelines.
• Flexible credit history requirements: VA loans are designed to be more forgiving of thin credit files or past credit challenges. While lenders still review credit, younger buyers with limited credit history often find VA qualification more accessible than with other loan types.

For younger borrowers who may still be building their financial foundation, these features work together to lower the cost of entry into homeownership, and make the path smoother compared to many conventional loan options.

Preparing for the home buying process

A smooth purchase starts with preparation. Here’s how to get ready before you apply.

1. Check your credit early

While the VA doesn’t set a strict minimum credit score, lenders often do. Checking your credit gives you time to correct errors or build your score before applying. Paying down small debts and keeping credit card balances low can help.

2. Understand what you can afford

• Debt-to-income ratio (DTI): Your DTI compares your total monthly debt payments, including credit cards, auto loans, student loans, and your future mortgage, to your gross monthly income.
• Why it matters: A lower DTI shows lenders you’re not overextended and can comfortably take on a mortgage. While the VA doesn’t set a hard DTI maximum, most lenders look for a number around 41% or lower. A manageable DTI can also help you qualify for a larger loan amount or better terms.
• Residual income: This is a unique VA requirement that measures how much money you have left over each month after paying your major expenses, including your mortgage.
• Why it matters: Residual income helps ensure you have enough cash available for essentials like food, transportation, childcare, and utilities. It’s one of the reasons VA loans have some of the lowest default rates in the industry, and it protects you from becoming “house poor” with a payment that leaves too little for day-to-day living.

Together, DTI and residual income give lenders a full picture of your financial stability and help determine a comfortable, sustainable mortgage payment for your situation.

3. Gather key paperwork

Getting your paperwork organized early can make your preapproval smoother and faster. Most VA lenders will ask for several standard documents to verify your income, assets, and eligibility:

• LES or recent pay stubs: These show proof of your current earnings and help the lender confirm your base pay, allowances, and any other income sources. Active-duty borrowers typically provide a Leave and Earnings Statement (LES), while veterans and non–active duty borrowers provide standard pay stubs.
• W-2s or tax returns: Lenders use these to review your income history and make sure it’s stable. W-2s are usually enough for borrowers with traditional employment. If you’re self-employed, work contract jobs, or have variable income, expect to provide full tax returns from the past one to two years.
• Bank statements: These verify that your income is being deposited as expected and that you have enough funds to cover upfront costs like earnest money and inspections. They also help lenders evaluate your financial habits and rule out undisclosed debts.
• Certificate of Eligibility (COE): This confirms your VA entitlement and verifies that you meet service requirements for a VA home loan. You can request your COE through the VA, or your lender can usually pull it for you during preapproval.

Check your VA home buying eligibility. Start here (Dec 15th, 2025)

4. Plan for upfront expenses

A major advantage of the VA loan program is the ability to buy a home with no down payment. But that doesn’t mean the process is entirely cost-free. Planning for a few common expenses can help you avoid surprises and keep your purchase on track.

• Earnest money: When you make an offer, sellers often request an earnest money deposit to show your commitment. This money is applied toward your closing costs or returned at closing, but you’ll need it available upfront when you submit an offer.
• Home inspection: While not required by the VA, a home inspection is highly recommended. It helps you identify potential issues with the property before you proceed — giving you peace of mind and the chance to negotiate repairs. Expect to pay this fee at the time of the inspection.
• Appraisal fees: The VA appraisal confirms the home’s value and checks that it meets the VA’s Minimum Property Requirements. This fee is typically paid upfront, and costs can vary by state. The appraisal protects both you and the lender by ensuring the home is safe, sound, and fairly priced.
• Moving and setup expenses: Once you close, you’ll still need to budget for moving costs, utility setup, deposits, initial furnishings, and any small repairs or upgrades. These expenses add up quickly, especially for first-time homeowners.

Setting aside a small financial cushion (even a few hundred dollars) can make the entire buying process smoother and help you handle unexpected costs without stress.

Using your VA loan as a first-time buyer

Here’s how the full process typically unfolds:

1. Confirm your VA eligibility and get your COE
2. Compare multiple VA-approved lenders
   
3. Get preapproved for a loan amount
4. Choose a real estate agent experienced with VA offers
5. Start house hunting within your approved budget
6. Make an offer and negotiate
7. Complete the appraisal and underwriting
   
8. Close on your home

Ways to strengthen your mortgage application

Small financial adjustments can make a big difference when you’re preparing for a VA loan. These steps can help you qualify more easily and potentially secure better terms:

• Reduce high-interest or high-payment debts: Paying down credit cards, auto loans, or personal loans can lower your debt-to-income ratio (DTI), making it easier for lenders to approve your loan amount.
• Keep credit card balances low: Using less of your available credit can boost your credit score and show lenders you manage debt responsibly, both important for younger buyers with limited credit history.
• Avoid opening new credit accounts before buying: New credit inquiries and accounts can temporarily dip your score and signal added financial risk. It’s best to pause new credit activity until after closing.
• Add a co-borrower (if needed): A co-borrower with strong income or credit can help strengthen your application, increase your qualifying loan amount, or improve your approval odds.
• Maintain stable employment and income: Lenders want to see consistency. Staying in your current job or avoiding large gaps in employment can help show financial stability and reduce underwriting concerns.

These steps can help position you as a strong, well-prepared borrower, even if you’re early in your financial journey.

Check your VA home buying eligibility. Start here (Dec 15th, 2025)

Smart strategies for younger vets and service members

Leverage BAH (if active duty)

If you receive Basic Allowance for Housing, you may be able to cover most or all of your mortgage payment. This can help you build equity while keeping out-of-pocket costs low.

Understand VA occupancy rules

VA loans require you to move in within 60 days of closing and live in the home as your primary residence. Later, you can convert it to a rental if your circumstances change.

Consider house hacking

Buying a 2–4 unit property with a VA loan lets you live in one unit and rent out the others. Rental income can offset your mortgage and help you build long-term wealth. Just make sure you’re ready for the responsibilities of being a landlord.

Mistakes first-time VA buyers should avoid

Even with the strong benefits of a VA loan, a few common missteps can make the homebuying process harder or more expensive than it needs to be. Here’s what to watch out for:

• Not comparing multiple lenders: VA lenders set their own rates, fees, and qualification guidelines. Getting quotes from at least three lenders can save you thousands over the life of your loan. A small difference in rates or closing costs can have a big impact on your monthly payment.
• Assuming you must put money down: One of the biggest advantages of a VA loan is the ability to finance 100% of the home’s price. While some buyers choose to make a down payment, it’s not required. Don’t drain your savings unnecessarily, especially when those funds could serve as a safety net for future home expenses.
• Ignoring seller concessions (VA allows up to 4%): VA guidelines let sellers contribute up to 4% of the home’s price toward certain costs, including prepaid taxes, insurance, and even paying down debt to help you qualify. Many first-time buyers overlook this negotiating tool, which can significantly reduce out-of-pocket expenses.
• Waiving the home inspection: A VA appraisal is not a home inspection. Skipping an inspection may save a few hundred dollars upfront but can expose you to costly repairs after closing. An independent inspection provides a clearer picture of the home’s condition and can help you negotiate repairs or walk away if major issues arise.
• Letting your preapproval expire: Preapproval letters typically last 60–90 days. If yours expires, you may need updated documents or a fresh credit check. Keeping your preapproval current ensures a smoother process when you’re ready to make an offer.
• Choosing a home at the top of your budget: Just because you qualify for a certain loan amount doesn’t mean it’s the right choice. Staying below your max budget gives you more room to handle future expenses, unexpected repairs, or life changes, and helps ensure long-term financial comfort.

Avoiding these pitfalls can help younger VA buyers stay confident, save money, and move through the homebuying process more smoothly.

The bottom line

A VA loan can be one of the most accessible ways for younger vets and service members to buy a home. With no down payment, flexible credit guidelines, and competitive rates, it opens the door to homeownership earlier in life.

By preparing your finances, choosing the right lender, and understanding the steps involved, you can use your VA benefit to purchase a home with confidence.