What Is a VA Loan, and How Does It Work?

Buying a home is a big expense.

And if you’re serving in the military or are a veteran, it can be more of a challenge compared to civilians.

That’s why the U.S. Department of Veterans Affairs (VA) developed the VA loan as a mortgage option explicitly for military personnel buying a house.

What Is a VA Loan?

It is a no or low down payment home loan offered by private lenders and backed by the VA up to 25 percent of the loan value.

The home loans for military program, created in 1944, was part of the GI Bill of Rights, otherwise known as the original Servicemen’s Readjustment Act. It’s a non-conforming loan because it doesn’t meet the guidelines of conventional lenders Freddie Mac and Fannie Mae.