Types Of VA Loans: Which Is Best For You?

A VA loan is a minimum or no-down-payment mortgage provided to veterans and active duty service members and their families. The mortgage is guaranteed by the US Department Of Veterans Affairs (VA) for those in the military to buy and refinance homes. You qualify for a VA loan when:

  • You have a certificate of eligibility (COE) from the Department of Veterans Affairs after being on active duty for at least 90 days. Also, you should’ve worked for a minimum of six years in the National Guard.
  • You’re a surviving spouse of a military service member who passed away while on active duty.
  • You’re a veteran or a military member and have a disability that’s linked to the service.

There are different types of VA loans. Continue reading this article to get to know the various types and benefits of VA loans.

  1. VA Purchase Loan

This is the standard and most common type of loan that veterans who meet the eligibility criteria can be given to buy a home without any down payment. Other critical requirements for veterans to access VA purchase loans are that they meet the income and credit essentials, and the home they purchase will be their primary residence. You’re assured of an adjustable or fixed-rate mortgage. Platforms like securityamericamortgage.com can provide clear details on this matter.


  1. VA Construction Loans

This type of loan has two options: one-time close, which covers the building expenses, and then automatically converts into a permanent loan when the home is complete. The other option is a two-time close, which involves a construction loan for building the house and a new loan to pay off the construction loan. You may visit Security America Mortgage and other similar sites for detailed information about such types of loans.

  1. VA Renovation Loan

This type of loan is obtained for the purpose of buying a home or financing home improvement expenses. Few lenders offer this type of loan.

  1. Fixed-Rate VA Loan

Veterans obtaining this kind of loan pay the same amount every month, and the interest rate is fixed throughout the loan period. There are no down payments only for situations where the purchase price is higher than the value assessment of the home. The borrower also doesn’t need private mortgage insurance.

  1. VA Interest Rates Reduction Refinance Loan

This type of loan is one of the most favorable options for paying off debt. It’s offered to homeowners who have a current VA loan and would like to lower the interest rate or shift from a current VA adjustable-rate mortgage to a fixed-rate mortgage. The advantage of this loan is that there’s no appraisal or income verification required.

  1. Adjustable-Rate VA Loan

With the adjustable-rate VA loan, there’s an adjustment of the interest rate periodically by adding a margin to an index dictated by the mortgage. Monthly payments change as the interest rate is adjusted. Closing costs are limited, and there’s no need for private mortgage insurance.

  1. VA Supplemental Loan

This type of loan is offered to cover the expenses incurred for home maintenance projects you undertake. This works because the excess amounts to the loan are added to your current loan, or could also be treated as a separate loan.

  1. VA Cash-Out Refinance Loan

This mortgage loan offers veterans the benefit of accessing lower interest rates and cash-out of home equity. The VA cash-out refinance loan is offered if the borrower submits a Certificate of Eligibility. A veteran, for example, can take out USD$40,000 equity in cash for a home that’s worth USD$120,000, and they owe USD$80,000. Depending on the lending policies, lenders limit how much the borrower can take out in cash. Some lenders allow 100% of the home equity, while others allow only 80%.

  1. Native American Direct Loan (NADL)

This type of loan is given to veterans who are meaning to purchase, construct, improve, or refinance a home. Any of these activities should be carried out on federal trust land. The advantages of this loan are that there are no down payments, low closing costs, and competitive rates.


The VA loan that’s best for you requires that you’re eligible, confident in yourself as an individual, and clear about your financial needs in the future. The best part is whichever type of loan you opt for comes with benefits for you to enjoy. You also have the luxury of choosing a particular loan for a specific purpose, e.g., construction, cash-out refinance, and renovation. VA loans have so many advantages—no down payments required, no need for mortgage insurance, low closing costs, and low-interest rates.