By Kevin Crooks, Jr.

VA Home Loans are our bread-and-butter around here, accounting for the lion’s share of our production and offering our Members several key benefits.

First, they offer 100% financing (zero down), low fixed-interest rates (typically lower by 0.5 or more than conventional loans) and minimal funding fees, all of which help Members achieve homeownership without the financial burdens associated with other mortgage programs. Plus, with VA Loans there’s no prepayment penalty: Members can pay off their mortgage early or make additional payments without being penalized.

To be eligible for a VA Loan, you must have served on active duty in the U.S. military or in the armed forces of a U.S. ally and you must have been discharged under conditions other than dishonorable. Those who served less than 90 days may still qualify if they were discharged because of a service-connected disability.

With that said, here are 5 things buyers and sellers should know about VA Loans in 2025:

Related: How the VA’s Home Loan Entitlement Works

1. Your home loan entitlement is a lifetime benefit

VA Loans aren’t a one-and-done proposition — in fact, there’s no limit to the number of VA Loans Members can take out during their lifetime, as long as they meet the eligibility requirements and can qualify with a lender.

Each servicemember or Veteran has a fixed entitlement amount, based on one-fourth of the conforming loan limit. Members can use their entitlement with one loan at a time or even have multiple VA Loans at once. However, there is a limit on the amount the VA guarantees to pay back to your lender should you default on a loan, and that may affect your VA entitlement and what you can borrow in the future.

Related: Best of 2024: Highlights From Our Blog

2. No Maximum loan limits

Higher home prices mean borrowers have to take out larger mortgages. The Blue Water Navy Vietnam Veterans Act of 2019 eliminated loan limits for borrowers with full entitlement to give military Veterans more buying power regardless of home prices. We are able to finance 100% of the loan amount above $1 million.

Of course, other lenders may have their own limits for VA Loans, so it’s a good question to ask when you’re considering which lender to use. Borrowers who can’t get a loan for the full price of a home may need to make a down payment to cover the discrepancy.

3. Universal fees for all military branches

The VA funding fee is a one-time charge borrowers can pay at closing (or it can be rolled into the loan). This fee offsets the risk to lenders and helps to fund the VA Home Loan program. The fee amount depends on several factors, including the type of loan, the number of times you’ve used your VA benefits, and your down payment amount.

The first time you take out a VA Home Loan, the funding fee is 2.15%. However, since you can use your entitlement multiple times, it’s not uncommon for someone purchasing for the second time to put 5% down and save more than a point and a half (1.8%) in funding fees.

There are some exemptions for having to pay the funding fee. For example, Veterans with a 10% or higher VA disability rating and Purple Heart recipients on active duty. Also previously National Guard and Reservists paid higher funding fees than active-duty servicemembers, but this distinction has been eliminated so all military members now pay the same rates.

2025 VA funding fee rates:

Down Payment	First-Time Use	After First Use
Less than 5%	2.15%	3.3%
5% or more	1.5%	1.5%
10% or more	1.25%	1.25%

Related: Climate Risk Is Top-of-Mind for Buyers, Homeowners and Insurers

4. An assumable VA Loan can help your listing stand out

Very few conventional loans are assumable, which works to the advantage for home sellers with a VA Loan.

An assumable mortgage allows a buyer to assume the interest rate, repayment period, current principal balance and other terms of a seller’s existing mortgage. In a rising-rate environment, as we’ve had for several years in a row, that can help your home stand out and attract more offers.

Buyers don’t necessarily have to be an active-duty servicemember or a Veteran to assume a VA Loan but there are some caveats: If the seller originated the loan before 1988, the buyer will not need permission from the VA or the lender to assume the mortgage. If the loan originated after 1988, though, the loan assumption must be lender-approved.

The buyer will still need to compensate the seller, generally at the close, for the amount of the mortgage the seller has already paid (their equity). This payment can come out of the buyer’s pocket or can be financed with another loan. In addition, it’s likely the buyer will need to pay the lender an assumption fee.

5. VA buyers can now compensate their real estate agent

While the full impact of the settlement of real estate commissions is not yet certain, there is an increased expectation that buyers will pay their own agent’s fees. In the past, this was prohibited by the VA but starting on August 10, 2024, the VA has said eligible Veterans, active-duty servicemembers and surviving spouses who use their VA Home Loan benefits can pay for certain real estate buyer-broker fees when purchasing a home. This update is intended to ensure VA’s programs continue to promote access to homeownership for Veterans.

This change, which the VA is calling "temporary,” is intended to level the playing field in an evolving homebuying market. VA buyers can still ask sellers to cover the buyer-broker fees at closing as part of purchase agreement negotiations.

We’re Here to Help

Whether you’re thinking about buying, ready to start home-shopping in earnest, or considering a refinance, an AAFMAA Mortgage Services LLC (AMS) Military Mortgage Advisor, a licensed mortgage loan originator, will be happy to provide you with an honest and fair comparison of your mortgage options, including a wide range of affordable mortgages designed to meet your needs.

Ensuring AAFMAA Members obtain the best mortgage possible is our mission. Get your free mortgage assessment today or give us a call at 844-422-3622!

Kevin Crooks, Jr. is the Business Development Manager for AMS.