VA Loans Explained

Nov 06, 2020

VA loans represent a very powerful loan program. Created under President Franklin D. Roosevelt in 1944, this flexible loan program has helped millions of American service members become homeowners. VA loans have some great benefits and unique quirks. Here are some things to be aware of when thinking about applying for this loan program.



  1. No down payment is required. Unless the purchase price exceeds the reasonable value of the property, no down payment will be required for qualified borrowers. On top of that, VA loans do not require private mortgage insurance (PMI), helping borrowers save even more money.

  2. Gift funds are allowed. If you receive gift funds from an acceptable donor you may use those funds on a VA loan.

  3. No cash reserve requirements. Cash reserve requirements – the amount of cash that banks must have on hand – are not required for VA loans. However, they do require residual income to be verified. Residual income is the amount of money left over each month after withholdings from your paycheck and expenses.

  4. Sellers pay for any required repairs & can pay for closing costs. Sellers can be asked to pay for some or all of your closing costs or required repairs, up to 4% of the loan amount.

  5. No pre-payment penalty. You can make extra payments any time you want, saving you a lot in interest over the life of your loan. You can even structure your payments to automatically deduct a little extra every month.


To determine your eligibility to participate in this program, provide your Certificate of Eligibility (COE) or your Discharge/Separation form (DD214). If you do not have your COE, you can request one using form 26-1880.

Other requirements:

  • 600 Min FICO

  • Max Loan Amount $750,000

  • VA Funding Fee - The veteran pays a funding fee to help defray costs of the VA Home Loan program. VA Funding Fee may be rolled into the loan amount


Interested? Contact one of our InterLinc mortgage professionals to learn more about this product today!


* InterLinc Mortgage Services, LLC.  NMLS ID: 205696.  InterLinc is an Equal Housing Lender.  DISCLAIMER: This is not a commitment to lend.  Credit and collateral are subject to approval. Other restrictions may apply.  Programs, rates, terms and conditions are subject to change without notice.