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VA Loan Pre-Approval: No Down Payment, No PMI, and How to Calculate Your Amount (2026)

VA loans are the best mortgage program in America. Zero down payment, no private mortgage insurance ever, rates 0.25-0.50% below conventional, and flexible DTI guidelines. If you qualify, there is rarely a reason to choose any other loan type.

VA Loan Advantages

$0 Down Payment

No down payment required with full entitlement. Buy a $500,000 home with $0 out of pocket (closing costs still apply but can be seller-paid).

No PMI Ever

No private mortgage insurance at any loan-to-value ratio. This saves $150-$300/month compared to conventional with less than 20% down.

Competitive Rates

VA rates average 0.25-0.50% below conventional. April 2026 average: ~5.90% VA vs 6.37% conventional on a 30-year fixed.

Flexible DTI

41% guideline but the residual income test is the real qualifier. Many veterans get approved above 41% DTI.

No Prepayment Penalty

Pay off your VA loan early without any penalty. Refinance freely when rates drop.

Assumable

VA loans can be assumed by qualified buyers. In a rising rate environment, this adds significant value to your home.

Eligibility Requirements

Active Duty

90 continuous days during wartime, or 181 days during peacetime, or 24 months

Veterans

Served required minimum and received other than dishonorable discharge

National Guard / Reserve

6 years of service, or 90 days activated under federal orders

Surviving Spouses

Spouse of service member who died in service or from service-connected disability (must be unmarried, with exceptions)

To prove eligibility, you need a Certificate of Eligibility (COE). Your lender can usually obtain this electronically through the VA Web LGY system in minutes.

The Residual Income Test

Unlike other loan types that focus primarily on DTI, the VA requires a minimum residual income after all obligations. This is the money left over for food, transportation, clothing, and other family expenses.

Family SizeNortheastMidwestSouthWest
1 person$450$441$441$491
2 people$755$738$738$823
3 people$909$889$889$990
4 people$1,025$1,003$1,003$1,117
5 people$1,062$1,039$1,039$1,158
Each additional+$80+$80+$80+$80

Source: VA Pamphlet 26-7, Chapter 4. For loans above $80,000. Amounts are monthly minimums.

VA Funding Fee Schedule

Down PaymentFirst UseSubsequent UseFee on $400K Loan
Less than 5%2.15%3.30%$8,600
5% to 9.99%1.50%1.50%$5,700
10% or more1.25%1.25%$4,500

Funding Fee Exemptions

The funding fee is waived for: veterans with a VA disability rating of 10% or higher, Purple Heart recipients serving on active duty, and surviving spouses receiving Dependency and Indemnity Compensation (DIC). If you are exempt, VA loans have zero upfront costs beyond closing.

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Frequently Asked Questions

Who is eligible for a VA loan?+
Eligibility includes active duty service members (90 days in wartime, 181 days in peacetime), veterans with honorable discharge, National Guard and Reserve members with 6+ years of service (or 90 days of active duty), and surviving spouses of service members who died in service or from a service-connected disability. You need a Certificate of Eligibility (COE) which can be obtained through your lender, online at eBenefits, or by mail with VA Form 26-1880.
Do VA loans have a maximum loan amount?+
For borrowers with full entitlement (first-time VA loan use or restored entitlement), there is no VA loan limit. You can borrow any amount a lender will approve with $0 down. For borrowers with partial entitlement (existing VA loan outstanding), the limit is tied to the 2026 conforming limit of $832,750. The VA does not lend money directly; they guarantee a portion of the loan, which allows lenders to offer favorable terms.
What is the VA funding fee and who is exempt?+
The funding fee is a one-time charge that helps fund the VA loan program. For first-time use: 2.15% with $0 down, 1.5% with 5%+ down, 1.25% with 10%+ down. Subsequent use rates are slightly higher. The fee is typically financed into the loan. Exemptions apply to veterans with a VA disability rating of 10% or higher, Purple Heart recipients, and surviving spouses. If you qualify for an exemption, you save $8,600 on a $400,000 loan.
What is the residual income test?+
The VA requires that after paying all monthly obligations (mortgage, taxes, insurance, debts, and an estimated maintenance/utility allowance), you have a minimum amount of income remaining for family needs. This residual income requirement varies by region and family size. For a family of 4 in the West, the minimum is $1,117/month. In the South, it is $1,003/month. This test is unique to VA loans and often matters more than the DTI ratio for approval.
Can I use a VA loan more than once?+
Yes. VA loan benefits can be used multiple times. If you sell the home and pay off the VA loan, your entitlement is fully restored. You can also have two VA loans simultaneously if you have remaining entitlement. The funding fee increases slightly for subsequent use (3.3% with $0 down vs 2.15% for first use), but the no-PMI and competitive rate benefits still apply. There is no lifetime limit on the number of VA loans.
How do VA loan rates compare to conventional?+
VA loan rates are typically 0.25-0.50% lower than conventional rates because the VA guarantee reduces lender risk. In April 2026, average VA 30-year rates are approximately 5.90% compared to 6.37% for conventional. Combined with $0 down payment and no PMI, VA loans offer the best overall value of any mortgage program. The trade-off is the funding fee (2.15% for first-time use), but this is waived for veterans with service-connected disabilities.