VA Loan Programs

The VA home loan benefit is bigger than most people realize. It can help you buy a home, refinance one, pull out equity, make a home more energy efficient, and, for veterans with certain service-connected disabilities, adapt a home to fit their needs.

This page walks through each program: what it does, who it fits, and the rules that matter.

ZYNG Mortgage isn't affiliated with the Department of Veterans Affairs. The VA runs these programs and decides eligibility. Private lenders make most VA loans, and some of the programs below are run by the VA directly.

The short version

• VA purchase loan. Buy a home you'll live in, often with no down payment and no monthly mortgage insurance.
• IRRRL. Refinance an existing VA loan to a lower rate, with fewer steps than a regular refinance.
• VA cash-out refinance. Use your equity, or refinance a non-VA loan into a VA loan.
• Energy efficient mortgage. Add the cost of certain energy improvements to your VA loan.
• Adapted housing grants (SAH and SHA). Grants, not loans, for veterans with certain service-connected disabilities.
• Native American Direct Loan (NADL). The VA's own loan for homes on federal trust land.

Through our lenders, ZYNG Mortgage offers VA purchase loans, the IRRRL, and the VA cash-out refinance. The adapted housing grants and the NADL come straight from the VA, and we're glad to point you in the right direction on those.

VA purchase loan

This is the one most people think of. A private lender makes the loan, and the VA backs part of it. That backing is why many eligible borrowers can buy with no down payment and no monthly mortgage insurance.

Who it fits: eligible veterans, service members, and some surviving spouses buying a home they'll live in.

What to know:

• You need a Certificate of Eligibility. See VA Loan Eligibility.
• The home must meet VA's minimum property requirements, checked by a VA appraisal.
• You must plan to live in the home. Homes with up to four units can work if you live in one.
• Most purchase loans carry a one-time funding fee, and many veterans are exempt. See The VA Funding Fee.
• The VA doesn't set a minimum credit score, but lenders can.

For the step-by-step, read How VA Loans Work.

VA Interest Rate Reduction Refinance Loan (IRRRL)

The IRRRL, sometimes called a VA streamline refinance, is for veterans who already have a VA loan and want a lower rate or a more stable payment.

Who it fits: homeowners with an existing VA loan whose rate is higher than today's market, or who want to move from an adjustable rate to a fixed rate.

What to know:

• You need an existing VA loan. An IRRRL can only refinance a VA loan into a new VA loan.
• Fewer steps. No appraisal is required on an IRRRL with our VA lenders, and the VA doesn't require a new credit underwriting package on most IRRRLs.
• You don't have to live there now. You certify that you used to live in the home. That's helpful if you've moved and kept the house.
• It has to help you. Federal law requires a real benefit. The new loan generally has to lower your rate by a minimum amount, and the costs generally have to be recouped through lower payments within 36 months.
• Seasoning. You generally have to wait until 210 days after the first payment due date on your current loan, and have made at least six consecutive monthly payments, before you can refinance.
• Funding fee. An IRRRL carries a smaller funding fee than a purchase, and exempt veterans don't pay it.
• No cash out. An IRRRL isn't for taking cash. That's the cash-out refinance below.

ZYNG Mortgage offers the VA IRRRL through our lenders. If you have a VA loan with a higher rate, ask us to run the numbers.

VA cash-out refinance

A VA cash-out refinance replaces your current mortgage with a new VA loan. It can do two different jobs:

• Take cash out of your equity for things like paying off debt, home improvements, or school.
• Refinance a non-VA loan into a VA loan, even without taking much cash, for example to drop monthly mortgage insurance on an FHA or conventional loan.

Who it fits: eligible homeowners who want to use their equity or move an existing loan into the VA program.

What to know:

• You need a COE and enough entitlement.
• It's a full refinance. Expect an appraisal, credit and income review, and VA's residual income test.
• The VA sets a maximum loan-to-value, and lenders may set a lower one.
• It has to benefit you. The law requires a net tangible benefit, and the lender has to give you a net tangible benefit test for the new loan.
• Seasoning applies if you're refinancing an existing VA loan.
• You must live in the home.
• Funding fee. A cash-out refinance generally carries a higher funding fee than a purchase with a down payment, and exempt veterans don't pay it.

Compare it with a HELOC or home equity loan on our Home Equity page. ZYNG Mortgage offers the VA cash-out refinance through our lenders.

Energy efficient mortgage

A VA energy efficient mortgage lets you add the cost of certain energy improvements to a VA purchase or refinance loan. Think insulation, new windows, solar, or a more efficient furnace or water heater. We offer it.

What to know:

• The improvements are added to the loan, within limits the VA sets.
• The VA caps how much can be added, and a larger amount is allowed only when the expected energy savings cover the higher payment. The amounts can change, so we don't print them here.
• The improvements generally need to make sense for the home, and the work has to be documented.

Adapted housing grants: SAH and SHA

These are grants, not loans. They help veterans and service members with certain service-connected disabilities buy, build, or change a home so they can live more independently.

Specially Adapted Housing (SAH) grant

For veterans and service members who own or will own the home, with service-connected disabilities such as:

• Loss of use of two or more limbs, or of a lower leg along with certain other conditions.
• Blindness in both eyes at the level VA sets.
• Certain severe burns.
• Loss of use of one lower extremity after September 11, 2001, when you can't balance or walk without aids. The VA can approve only a limited number of these each fiscal year.

Special Home Adaptation (SHA) grant

For veterans and service members where they or a family member own or will own the home, with service-connected disabilities such as loss of use of both hands, certain severe burns, or certain breathing injuries.

How the grants work

• You can generally use the grants up to six separate times over your lifetime, up to the maximum amounts.
• The maximum amounts are set each fiscal year and can change.
• A Temporary Residence Adaptation (TRA) grant can help if you're living for a time in a family member's home that needs changes.

Apply through the VA. A grant can help you buy, build, or change your home, and the VA can explain how it works alongside a home loan.

Native American Direct Loan (NADL)

This one is different: the VA is the lender. The NADL helps eligible Native American veterans, and veterans married to a Native American, buy, build, or improve a home on federal trust land.

Because the VA makes the loan directly, you apply with the VA and work with the VA. A private lender like us doesn't originate it. If this fits you, contact the VA's Native American Direct Loan program.

How to choose the right VA program

A few questions sort out most situations:

1. Are you buying or refinancing? Buying points to the purchase loan.
2. Do you already have a VA loan? If you want a lower rate and no cash, look at the IRRRL first.
3. Do you want cash, or to move a non-VA loan into VA? That's the cash-out refinance.
4. Is the home ready, or does it need energy work? An energy efficient mortgage may help.
5. Do you have a qualifying service-connected disability? Ask the VA about SAH or SHA grants, which can be used alongside a loan.
6. Is the home on federal trust land? Look at the NADL.

Common questions

What's the difference between an IRRRL and a cash-out refinance?

An IRRRL refinances an existing VA loan to a lower rate with fewer steps and no cash out. A cash-out refinance is a full refinance that can pull out equity or move a non-VA loan into VA.

Do I need an appraisal for an IRRRL?

No. Our VA lenders don't require an appraisal on an IRRRL. That's one reason it's usually quicker than a full refinance.

Can I refinance my FHA or conventional loan into a VA loan?

Yes, through a VA cash-out refinance, if you're eligible and qualify. It can be a way to drop monthly mortgage insurance.

Are SAH and SHA grants loans?

No. They're grants for veterans with certain service-connected disabilities.

Can I use the IRRRL if I don't live in the home anymore?

Generally yes. You certify that you used to live there.

Does every VA program have a funding fee?

Most VA loans do, at different amounts, and many veterans are exempt. See The VA Funding Fee.

Next step

Not sure which program fits? Start with our VA eligibility check, or get a personalized quote. You can also read VA Loans, How VA Loans Work, and Refinance, or call us at 530-888-6000.

Sources

• U.S. Department of Veterans Affairs, VA home loan types: va.gov
• U.S. Department of Veterans Affairs, Disability housing grants for Veterans: va.gov
• U.S. Department of Veterans Affairs, VA funding fee and loan closing costs: va.gov
• VA Pamphlet 26-7, Chapter 6, Refinancing Loans: knowva.ebenefits.va.gov
• 38 U.S.C. 3709, Refinancing of housing loans: law.cornell.edu
• 38 U.S.C. 3729, Loan fee: law.cornell.edu