How to Use a VA Loan for the First Time: Step-by-Step

Before You Start: Eligibility and COE

Confirm you meet the service requirement (90 days wartime active duty, 181 days peacetime, 6 years Guard/Reserve, etc.). Pull your DD-214 and have it ready.

Request your Certificate of Eligibility (COE) through VA.gov, or let your lender pull it electronically. It's free and usually returns in seconds.

Get Your Credit and Budget in Order

• Pull credit from all three bureaus — most lenders look for a mid-score of 580–620 minimum.
• Calculate DTI: total monthly debt ÷ gross monthly income. Under 41% is the comfort zone.
• Save 2–5% for closing costs even though no down payment is required.
• Check residual income — the VA's unique calculation that adds a margin of safety after debt payments.

Pick the Right Lender

Not all lenders are good at VA loans. Look for one that closes hundreds of VA loans per year, not a handful. Ask three concrete questions:

• How many VA loans did you close last year?
• Will you absorb the appraisal fee if the deal falls through due to VA underwriting?
• What is your average days-to-close on a VA loan?

Get Pre-Approved (Not Pre-Qualified)

Pre-qualification is a soft estimate; pre-approval involves real underwriting and produces a letter sellers take seriously. In hot markets, a VA pre-approval letter helps overcome bias against VA financing.

Find a VA-Savvy Real Estate Agent

Ask agents directly: 'How many VA loans have you closed in the past year?' A great agent will write offers that reduce VA-specific objections — like including a clause that the seller pays the termite inspection (required on VA loans in many states).

Making the Offer

• Negotiate seller concessions up to 4% — they can cover the funding fee, prepaid taxes, and discount points.
• Be ready for the VA appraisal, which checks both value and Minimum Property Requirements (MPRs).
• Use a strong escalation clause if needed; competing against cash buyers is real.

The VA Appraisal

The VA appraisal is more thorough than a conventional one. The appraiser checks for safety, sanitation, structural soundness, and overall livability — peeling paint, broken windows, exposed wiring, and roof issues can all stall a deal.

If the appraisal comes in low, you have options: renegotiate price, request a Reconsideration of Value (ROV), or pay the difference in cash.

Closing Day

VA loans typically close in 30–45 days. At closing you'll sign disclosures, pay closing costs (or have them rolled in via lender credit / seller concession), and receive keys.

Service-connected disabled veterans rated 10% or higher are funding-fee exempt. Verify this is reflected on the Closing Disclosure — it's a common refund issue.

Step-by-step

1. Confirm eligibility and pull DD-214. Make sure your character of service supports VA loan eligibility.
2. Request COE. Through VA.gov or let your lender pull it.
3. Tune up credit and DTI. Pay down revolving debt; avoid new credit accounts.
4. Get pre-approved. From a high-volume VA lender.
5. Shop with a VA-savvy agent. Reduces friction with sellers.
6. Make an offer. Use seller concessions to cover closing costs.
7. Clear the VA appraisal. Watch for MPR issues.
8. Close. Verify funding fee exemption if applicable.

Common mistakes to avoid

• Choosing a lender that rarely closes VA loans.
• Skipping the residual income check and over-borrowing.
• Letting an agent talk you out of a VA loan because of appraisal myths.
• Forgetting to verify funding-fee exemption at closing.

Frequently asked questions