VA Loans for Home Purchase
A VA purchase loan lets eligible California buyers finance a home they will live in, with no monthly mortgage insurance and, with full entitlement, no VA loan limit. No down payment is generally required up to the loan amount equal to the home’s reasonable value, but cash can still be needed for other costs. This guide covers how the loan works from offer to closing.
Key Takeaways
- VA loans are guaranteed by the Department of Veterans Affairs, so eligible borrowers can buy with a low or no required down payment.
- You need a Certificate of Eligibility (COE), and the home must be your primary residence.
- Most buyers pay a one-time VA funding fee, which can be financed. Some borrowers are exempt.
- Lenders also check your credit, income and residual income.
- The VA appraisal confirms value and that the home meets VA property standards, and a termite inspection is required.
How does a VA purchase loan work?
You apply with a VA-approved lender, such as Lendia. The Department of Veterans Affairs guarantees part of the loan, which lowers the lender’s risk. In exchange, VA loans offer features conventional loans often do not: no required down payment for eligible borrowers with full entitlement, no monthly mortgage insurance, and no VA loan limit when you have full entitlement. The limits of that benefit are explained in the section on when you may still need cash.
Who qualifies?
Eligibility depends on your service. See VA loan eligibility and the Certificate of Eligibility for the service requirements and how to request your COE. At Lendia, we can help you request it. Then you qualify on credit, income and residual income. The VA sets no minimum credit score, and lenders set their own. At Lendia, we can work with scores as low as 580 on purchases up to $1,000,000. Larger loans typically need 680 to 720.
What does it cost?
- VA funding fee. A one-time fee based on your down payment and whether you have used the benefit before: 2.15% (first use) or 3.30% (subsequent use) with less than 5% down, 1.50% with 5% to under 10% down, and 1.25% with 10% or more down. Some borrowers are exempt.
- Closing costs. Lender or broker fees, title, escrow, appraisal and recording charges, like any California purchase, often roughly 2% to 4% of the price. Sellers may pay normal closing costs and points, and other seller concessions are capped at 4%.
- Prepaids and reserves. Prepaid interest, homeowners insurance and initial property tax impounds.
- Down payment. Optional, but a larger one lowers the funding fee and your monthly payment.
When you may still need cash
A VA loan does not mean you never need money at closing. Cash may still be needed when:
- The price is above the appraised value. The VA loan is based on reasonable value. If the home appraises for less than the contract price, you can renegotiate, pay the difference, or walk away under your contract terms.
- You have reduced entitlement. Above the county limit, the lender may ask for a down payment on the excess. See VA loan limits.
- Closing costs, prepaids and points are not covered by the seller or financed. The seller may pay normal closing costs and points, but only if the contract says so.
- Earnest money and inspections. These are due before closing, although the deposit is credited at closing.
What is the purchase process, step by step?
- Request your Certificate of Eligibility.
- Get pre-approved so sellers take your offer seriously. See how to apply for a VA loan.
- Find a home that will be your primary residence. See occupancy and property rules.
- Make an offer. Your lender orders the VA appraisal.
- Complete underwriting, including the termite inspection required on VA purchases.
- Review your Closing Disclosure, close and move in. The VA occupancy rule generally expects you to move in within a reasonable time, commonly 60 days.
Tips for writing a competitive VA offer
- Include a pre-approval letter from a lender who knows VA loans.
- Work with an agent who can explain VA appraisal and repair rules to the listing side.
- Know your limits on price. If the appraisal comes in low, decide in advance how you would handle it.
- Ask about seller credits within VA rules.
What do VA purchase loans look like in California?
California buyers use VA loans from San Diego to Sacramento. With full entitlement, there is no VA loan limit, and the 2026 Orange County single-family limit of $1,249,125 only matters if you have reduced entitlement. Look up your county for your figure. For program details, see do VA loans require a down payment, what properties you can buy and our VA mortgage purchase loan checklist.
At Lendia, we make VA purchases straightforward
At Lendia, we shop your VA loan across multiple lenders, walk you through the COE, and tell you up front what your payment and closing costs will look like. Rates and terms depend on your situation; approval requires qualification. Contact us to talk with a Licensed Lendia California Loan Officer, or get a rate quote now.
Frequently Asked Questions
Is a down payment required for a VA loan?
Eligible borrowers with full entitlement generally do not need a down payment up to the home’s reasonable value, though putting money down lowers the funding fee. Cash may still be needed for other costs.
Can I use a VA loan more than once?
Yes. A subsequent use carries a higher funding fee when you put less than 5% down, unless you are exempt.
Do VA loans have mortgage insurance?
No monthly mortgage insurance. The one-time funding fee is the VA’s cost-sharing charge.
What happens if the appraisal is lower than the price?
The loan is based on the appraised value. You can ask the seller to lower the price, pay the difference, or request a reconsideration of value.
Can I buy a home with someone who is not a veteran?
Yes, but the guaranty covers only the veteran’s share, so a down payment may be required. Ask us before you apply.
Talk to a Licensed Lendia California Loan Officer
At Lendia, we review your situation and show you the programs you qualify for.