With terms set by the U.S. Department of Veteran Affairs (VA), VA Loans are specifically designed to assist U.S. veterans, service members, and their surviving spouses obtain homes. However, this flexible loan type isn’t limited to home purchases, allowing qualifying borrowers to use the funds to construct new homes or renovate existing properties. Borrowers can even refinance a mortgage with a VA Loan.
Though a lender ultimately issues a VA Loan, the VA establishes the loan’s generous terms. Qualifying applicants aren’t required to purchase mortgage insurance or put in a downpayment, nor are they penalized for prepayment. VA loans are made even more attractive by their highly competitive interest rates.