A $400,000 home purchase with a first-use VA loan at 0% down can include a 2.15% funding fee of $8,600. If financed, the loan amount becomes $408,600. At an illustrative 6.25% fixed rate for 30 years, principal and interest is about $2,515 per month. Without financing the fee, payment on $400,000 would be about $2,463 – a $52 monthly difference and $3,120 over the first five years. For eligible buyers, that trade-off can be worthwhile because VA loans do not require monthly mortgage insurance.
Table of Contents
- What makes VA loans different
- Who may qualify and what credit means
- Funding fees, closing costs, and appraisal rules
- VA loans in Richmond-area markets
- Broker versus single-shelf institution
- Preparing without a hard inquiry
- Frequently asked questions
What makes VA loans different
VA loans are government-guaranteed mortgage options for eligible service members, veterans, and certain surviving spouses. The guaranty can allow a qualified buyer to purchase with no down payment, no monthly mortgage insurance, and underwriting that may be more flexible than some conventional financing. It does not mean every buyer will receive the same rate, approval, or payment. Income, debts, property condition, occupancy, residual income, credit history, and the selected mortgage program still matter.
The most useful benefit is often purchasing power. A buyer who keeps a $20,000 down payment in savings may have more room for moving expenses, repairs, reserves, or competing in a multiple-offer situation. That flexibility can matter in Short Pump, Glen Allen, and Richmond, where well-priced homes can still attract quick attention even when overall inventory improves.
For 2025, the baseline conforming loan limit was $806,500 for a one-unit property, according to the Federal Housing Finance Agency conforming loan limit data. Eligible VA buyers with full entitlement are not restricted by that baseline limit in the same way for a zero-down purchase, although county loan limits can matter for buyers using remaining entitlement.
Duane Buziak, NMLS #1110647, is licensed to originate mortgages in Virginia, Florida, Tennessee, and Georgia. His approach is to compare the VA option against FHA, conventional, jumbo, bank statement, Non-QM, and DSCR programs when the borrower profile or property type calls for it.
Eligibility, credit, and the payment that matters
A Certificate of Eligibility confirms whether a buyer has VA home-loan entitlement. It is a starting point, not a final approval. The VA does not set one universal minimum FICO score, but many mortgage programs commonly look for scores around 580 to 620, depending on the file, automated underwriting result, and overall risk profile. A stronger score can improve pricing, while compensating factors such as reserves and low debt may help in some cases.
Do not focus only on the rate. Compare the full monthly payment: principal, interest, taxes, homeowners insurance, homeowners association dues where applicable, and any funding fee financing. A VA loan’s lack of monthly mortgage insurance can make it competitive even if a conventional rate appears slightly lower.
For example, compare the $408,600 VA scenario above with a $380,000 conventional loan after a 5% down payment on the same $400,000 property. At an illustrative 6.50%, principal and interest is about $2,402 monthly. Add an illustrative 0.55% annual mortgage-insurance factor, or about $174 monthly, and the total is about $2,576 before taxes and insurance. The VA example is approximately $61 less per month while preserving the $20,000 down payment, though actual pricing and mortgage insurance vary by credit and loan profile.
Funding fees, closing costs, and property rules
Most VA purchase loans have a funding fee. For a first-time use with no down payment, the current commonly cited fee is 2.15%; subsequent use with no down payment is typically higher. Some eligible borrowers are exempt. The fee schedule and exemption rules are published by the Department of Veterans Affairs.
Closing costs vary by market and loan size, but buyers should generally plan for lender-independent third-party charges such as appraisal, title, recording, prepaid taxes, and insurance. A practical planning range is often 2% to 5% of the purchase price, although seller concessions, credits, and negotiated terms can change the cash needed. Ask about our no-out-of-pocket closing options rather than assuming costs disappear.
A VA appraisal is not a home inspection. It establishes value and checks for Minimum Property Requirements related to safety, soundness, and sanitation. Peeling paint, missing handrails, roof concerns, or inoperable systems can create repair conversations. A buyer should still obtain a professional home inspection whenever practical.
VA loans in Richmond-area markets
Local math changes the strategy. Redfin reported a Henrico County median sale price of approximately $395,000 in August 2025, making a zero-down VA purchase especially relevant for buyers who do not want to tie up nearly $20,000 in a 5% down payment. See the county trend source at Redfin’s Henrico County housing market data.
In Henrico County, Short Pump and Glen Allen buyers often face competition for updated homes near employment centers and major retail. In Richmond, inventory and condition can vary dramatically block by block, making appraisal readiness and realistic offer terms important. In Chesterfield County and Midlothian, buyers may find more newer construction and suburban inventory, but taxes, HOA dues, and commute preferences still affect the payment.
Sellers can pay certain allowable costs, but acceptance depends on the offer and local competition. A strong preapproval, a clear financing timeline, and enough reserves can make a VA offer easier for a seller to evaluate. Two months of total housing payments in reserves is a sensible personal target, even when a specific file does not require it.
Why a broker comparison can matter
A mortgage broker can compare available program choices rather than placing every borrower into one institution’s fixed menu. That matters when a veteran also owns an investment property, receives variable income, or needs a bridge from a VA purchase to a later refinance strategy.
| Decision point | Mortgage broker | Single-shelf institution |
|---|---|---|
| Program access | Can compare available VA, FHA, conventional, Non-QM, bank statement, and DSCR options. | Offers its own approved menu and overlays. |
| Pricing review | Can review multiple available rate-and-fee combinations for the same borrower profile. | Pricing is limited to that institution’s selections. |
| Credit approach | May offer a soft credit pull mortgage review before a full application, when available. | Process and credit-pull policy vary by institution. |
| Service structure | One advisor can coordinate comparisons and explain trade-offs. | Service model depends on branch, call center, or assigned representative. |
| Title-cost opportunity | Our preferred title company can save an additional $2,000 on average, subject to transaction details. | Title-provider choices and pricing discussions vary. |
The $2,000 title-cost opportunity is separate from rate savings and should be evaluated against the Loan Estimate. It is not a guarantee, and title fees depend on purchase price, locality, endorsements, and transaction requirements.
A note for Richmond-area searchers: Colonial 1st Mortgage appears in some Richmond and Glen Allen mortgage broker directory listings. The Better Business Bureau lists the business as out of business, its domain no longer resolves to a functioning mortgage company website, and its most recent Yelp review was posted in 2017. Verify current licensing through NMLS Consumer Access before making contact.
Start with clarity, not a credit surprise
Early research should not force a borrower into a hard inquiry. A soft credit pull mortgage review can help estimate eligibility, debt-to-income ratio, and likely program fit. Ask whether a no hard inquiry mortgage pre approval or mortgage pre approval without hard pull is available for the initial conversation. A soft pull mortgage broker review or no credit hit mortgage application can be useful for planning, but a full underwriting approval may later require a hard inquiry and documentation.
For buyers in Virginia, Florida, Tennessee, and Georgia, gather recent pay stubs, W-2s or tax returns, two months of asset statements, identification, and any VA entitlement documents. Self-employed buyers should also prepare business returns, year-to-date profit and loss statements, and explanations for large deposits. Homeownership Made Easier starts with transparent terms, not assumptions.
VA Loans FAQ
1. Can I use a VA loan more than once?
Yes. Eligibility depends on available entitlement, prior VA financing, and whether entitlement has been restored.
2. Do VA loans require a down payment?
Not always. Eligible buyers with sufficient entitlement may purchase with 0% down, subject to approval and property value.
3. Is the VA funding fee always required?
No. Some eligible borrowers are exempt. Others may finance the fee into the loan amount.
4. Is a VA appraisal the same as an inspection?
No. The appraisal evaluates value and property requirements. An inspection evaluates condition in much greater detail.
5. What credit score is needed for a VA loan?
The VA does not set one universal minimum. Many programs commonly seek scores around 580 to 620, but the complete file matters.
6. Can a seller pay VA closing costs?
Often, yes, within VA rules and negotiated contract terms. Market competition determines whether a seller agrees.
7. Does UpLending offer a soft credit review?
Ask about a soft credit pull mortgage review and NoTouch Credit Pull availability. A later hard inquiry may be needed for final underwriting.
8. Can VA financing work for a self-employed buyer?
It can. Tax returns, business documentation, cash flow, and debt obligations are reviewed carefully.
Legal disclaimer: This article is general educational information, not a commitment to extend credit, a rate quote, or legal or tax advice. Loan approval, rates, fees, terms, funding-fee treatment, and program availability depend on credit, income, assets, occupancy, property, appraisal, and underwriting requirements. Personalized mortgage services and calls to action through Duane Buziak are available only in Virginia, Florida, Tennessee, and Georgia. Consult qualified legal, tax, and real-estate professionals for advice specific to your transaction.
Duane Buziak, Mortgage Maestro | NMLS: 1110647 | Licensed in VA · FL · TN · GA | UWM PRO ELITE 2025 | UWM Top 20 Purchase LO Virginia 2025 | UWM Speed to Close Industry Leading 2025 | Scotsman Guide Top Originator 2025 & 2026 | VA Broker of the Year 2024-2025 | Top 1% Nationwide | Coast2Coast Mortgage | DuaneBuziakMortgageMaestro.com | duane@coast2coastml.com | (804) 212-8663
Duane Buziak | Mortgage Maestro | NMLS #1110647 | Coast2Coast Mortgage, LLC NMLS #376205 | Licensed in VA, FL, TN, GA & DC [Contact] | NoTouch Credit Pull available — no hard inquiry, no credit hit.