Earned. Used right.

The flagship VA product. 100% LTV with no down payment required, no monthly mortgage insurance, and no minimum credit score set by the VA itself (lender overlays typically require 580–620). The borrower must hold a valid Certificate of Eligibility (COE) and meet VA service requirements.

Loan amounts above the county conforming loan limit ("VA jumbo") require partial down payment because the borrower's entitlement covers only up to the conforming limit at 25% guaranty. Above that, the borrower brings 25% of the difference between loan amount and conforming limit. There is no hard ceiling — VA loans regularly close above $1.5M.

Eligible property types: 1–4 unit primary residences, VA-approved condos, and manufactured homes on permanent foundations. Owner-occupancy is required within 60 days of closing.

The VA equivalent of an FHA Streamline — but with a fundamentally different qualifying test. The existing loan must be VA-guaranteed; the new loan must satisfy VA's net tangible benefit (NTB) test under 38 USC § 3709. The cornerstone of NTB is **recoupment**: the borrower must recover specific recoupable closing costs through monthly payment savings within 36 months. "Recoupable costs" is a defined subset — title, recording, lender, and origination fees count; the funding fee itself, escrow deposits, prepaid interest, and certain other line items do NOT. Many costs that appear on the closing disclosure aren't part of the recoupment math at all.

No appraisal, no income or employment documentation, and the borrower never has to be re-qualified at standard underwriting. Closing costs can be rolled into the new loan amount, but only the recoupable portion factors into the NTB recoupment test. Cash back is limited to $500 — the IRRRL is a rate-and-term refinance, not a cash-out.

The funding fee on an IRRRL is 0.5% — substantially lower than a purchase or cash-out funding fee. Seasoning: 210 days from the prior closing plus 6 on-time payments minimum. Whether your specific scenario clears the recoupment test depends on the cost mix and the rate-payment delta — we model that math against your actual loan estimate before quoting terms.

VA-guaranteed cash-out refinances allow up to 100% LTV — the borrower can refinance and pull cash up to the full appraised value. No other major residential program goes to 100% on cash-out (FHA caps at 80%, conventional at 80% on owner-occupied, jumbo varies).

Unlike the IRRRL, this is a fully-underwritten loan: appraisal, income docs, employment verification, full credit re-pull. The existing loan can be a VA, FHA, or conventional — the borrower does not need to currently hold a VA loan to refinance into one.

Two variants under VA rules: Type I (loan amount ≤ payoff balance, traditional rate-and-term) and Type II (loan amount > payoff balance, true cash-out). The VA OTC New Construction refinance must be submitted as a Type II.

A construction-to-permanent VA loan that closes once, before construction begins. 100% LTV on the as-completed value — the eligible borrower brings no down payment to a build that they would otherwise need a 20% construction-loan deposit for. Interest-only on the drawn balance during the construction period; converts to a 30-year fixed VA loan automatically at completion.

Construction term maxes at 11 months. The borrower never pays interest out of pocket during construction — the funds for the construction-period interest payments are escrowed by the lender from the builder's budget at closing and disbursed monthly. The borrower receives a statement showing the prior month's payment was made.

Existing-foundation reuse is not permitted on VA OTC; the appraisal cannot show anything beyond completion of the foundation. Manufactured homes (1-unit, non-jumbo) are eligible. Construction cannot begin prior to loan submission (no pre-started loans on VA OTC).

When a veteran already has an outstanding VA loan that hasn't been paid off, the VA benefit doesn't shut down — it goes into "second-tier" or partial-entitlement mode. The most common scenario: a service member PCS-relocates, keeps the prior home as a rental rather than selling, and uses remaining entitlement to buy in the new market.

The math: VA caps available entitlement at the county conforming loan limit × 25%, minus the entitlement already charged to the existing VA loan(s). If that available figure is at least 25% of the new loan amount, the veteran can still close at zero down. If it's less, the gap becomes the required down payment.

Pulling line 18 of the COE shows the prior entitlement charged to the dollar. We use that figure plus the new property's county loan limit to model the exact down payment required — usually in 10 minutes once the COE is in hand. The Second-Tier Entitlement calculator linked below runs the same math interactively.

When a veteran takes a VA loan jointly with a non-veteran (a civilian spouse, fiancé(e), partner, parent, sibling, or business partner), VA only guarantees the veteran's portion of the loan. The non-veteran's share gets no government backing — which means the lender requires standard 25% combined coverage on that portion via down payment.

Default split on a typical 50/50 vet + non-vet purchase: 12.5% of the total purchase price as down payment. The math is mechanical — VA covers 25% × 50% (vet share) = 12.5% via guaranty, and the non-vet's 50% needs 25% × 50% = 12.5% covered by down payment. If the parties hold title in unequal shares (75% vet / 25% non-vet, etc.), the down payment scales proportionally.

The exception: if the spouse is also an eligible veteran or active-duty service member with their own COE, the loan is a "joint VA loan" — full guaranty on the entire loan, zero down. We always check both parties' VA eligibility before defaulting to non-vet co-borrower math.

Eligibility is based on length and character of military service, with different rules for active-duty, regular-service veterans, National Guard, reservists, and surviving spouses. The current VA service requirements: 90 continuous days of active service in wartime, 181 continuous days in peacetime, or 6 years in the Selected Reserve or National Guard. Surviving spouses of veterans who died in service or from a service-connected disability also qualify.

The Certificate of Eligibility (COE) is the document VA issues confirming the borrower's entitlement is intact and how much guaranty is available. We pull COEs through the VA Lender Portal — typically 24-hour turnaround when the borrower provides DD 214 (regular service) or NGB-22 (Guard) and basic identity information. Surviving spouses use VA Form 26-1817.

Reusable benefit: paying off a VA loan restores the entitlement, and the borrower can use it again. Borrowers can also have two VA loans simultaneously in some scenarios (e.g., PCS relocation where the prior home becomes a rental).