What Is a VA Loan in Real Estate?

A VA loan is a mortgage program backed by the U.S. Department of Veterans Affairs that helps eligible veterans, active-duty service members, and surviving spouses buy homes with favorable terms — often no down payment and no private mortgage insurance (PMI).

✅ How VA Loans Work

  • The VA guarantees a portion of the loan, reducing risk for lenders and eliminating the need for PMI.
  • Borrowers must meet service eligibility requirements and obtain a Certificate of Eligibility (COE).
  • Loans are made by approved private lenders, but backed by the federal government.
  • Buyers can finance up to 100% of the home’s value, with competitive fixed or adjustable rates.

💡 Key Benefits and Limitations

  • ✅ No down payment: Most buyers can finance 100% of the purchase price.
  • ✅ No PMI: Saves thousands over the life of the loan.
  • ✅ Easier qualification: Flexible credit standards compared to conventional loans.
  • ⚠️ Funding fee: A one-time VA fee (often 1.25%–3.3%) applies, though it can be financed.
  • ⚠️ Primary residences only: VA loans cannot be used for investment or vacation properties.

📍 Why VA Loans Matter for FSBO Sellers

When selling For Sale By Owner (FSBO), accepting VA financing can expand your buyer pool significantly. Many qualified buyers use VA benefits, so ensuring your property meets VA appraisal and inspection standards can help your home sell faster.

Listing your property on the MLS with Brokerless helps your listing appear to VA-approved lenders and agents searching for eligible properties.