11 Best VA Loan Lenders of 2022

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The Department of Veterans Affairs has been helping veterans, and their families qualify for home loans since 1944. VA loans are not issued by the VA but rather through banks and lenders. However, the VA does guarantee each qualified VA loan.

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There are many benefits of VA loans compared to conventional mortgages. For example, applicants can apply for a VA mortgage with no down payment, and you don’t have to purchase private mortgage insurance (PMI).

You’ll likely get a lower interest rate than you would with a conventional mortgage. And you can qualify for a VA mortgage even if you only have fair credit.

Best VA Mortgage Lenders of May 2022

Even though you’ll get a discount with the VA loan program, it’s still important to shop around to find the best VA mortgage lender. In theory, you could apply for a VA loan with any mortgage lender, but some are better than others.

You should choose the lender that will give you the lowest VA loan rates and the most flexible repayment terms. Here are the eleven best VA mortgage lenders:

Veteran First Mortgage

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Veterans First Mortgage has been around since 1985 and has worked with more than 175,000 military and non-military customers. The company provides personalized service and competitive VA home loan products, and its focus has always been on helping veterans.

At least 90% of the Veteran First’s loan originations are VA loans, so the company has the experience to work with veterans. Veterans will have to pay a VA funding fee, typically between 0.5% and 3.3%. However, most borrowers choose to roll it into the loan amount.

Veterans First requires a minimum credit score of 600 to apply. The company doesn’t publish its APR range on its website, so you’ll have to apply to see what you qualify for. And the company does charge a 1% origination fee.

Navy Federal Credit Union

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Navy Federal Credit Union was founded in 1933 and is the largest credit union in the world, with more than eight million members. To become a member, you must be a veteran, an active member of the military, or employed with the U.S. Department of Defense.

In addition to VA loans, the credit union offers a wide range of affordable loan and banking products designed for military service members. The APR for VA loans starts as low as 3.591%. And Navy Federal will even match you with a top-performing real estate agent in your area.

Navy Federal Credit Union doesn’t publish its credit score requirements. However, it is willing to consider other forms of credit history, such as income and payment history.

Veterans United Home Loans

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Veterans United Home Loans was named the best VA lender for 2018 by the Department of Veteran Affairs. It’s one of the fastest-growing VA mortgage lenders in the country, and no other bank focuses on veterans the same way they do.

Veterans United offers every type of VA mortgage that exists including, fixed and adjustable loans, IRRRL loans, cash-out refinance loans, and jumbo loans. Additionally, 15-year mortgages start at 3.701% APR, and 30-year mortgages start at 3.624% APR.

You will need a credit score of 620 or higher to apply. But if your credit score falls below this, Veterans United provides a credit repair consultant to help veterans improve their credit score under the Lighthouse Program.

Veterans interested in applying can have a free VA loan consultation either online or in person. And they offer 24/7 customer service, so someone is always available to answer your questions.

LoanDepot

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LoanDepot is among the largest non-bank lenders in the country and offers various loan products, including VA loans. The lender is an ideal choice if you’re short on time and you need to close a VA loan fast. LoanDepot’s Mello Smartloan digital application eliminates paperwork to reduce the closing time by 17 days. 

A minimum credit score of 620 is required for a loan, but loanDepot doesn’t publish the APR, so you have to apply to find out what you qualify for. However, they will waive the refinancing fee for any existing customers.

USAA

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USAA offers banking and home loans to military members and their families. Over the past five years, USAA issued more than 155,000 VA loans. They offer competitive rates starting at 3.791% APR for a 30-year VA mortgage.

USAA has a 5/1 adjustable-rate VA mortgage product that is particularly attractive to those on active duty who have to move every few years. For the first five years, the rate will be around 3.922% APR then it will adjust to market interest rates. However, most people expect that interest rates will be higher in five years than they are today.

If you’re a first-time homebuyer who can’t qualify for a VA mortgage, USAA offers loans with a required down payment as low as 3%. The bank also offers several competitively priced insurance products.

Quicken Loans

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Quicken Loans offers several VA mortgage options. The company is known for its quick-response customer service and speedy online mortgage application process, called Rocket Mortgage. Quicken can provide instant verification for most applicants, thanks to their online loan application process.

A 30-year VA home loan comes with rates starting at 3.877% APR. Borrowers will need a credit score of 620 or higher to qualify and a down payment of at least 3%. Quicken Loans is a good option but keep in mind that they don’t have the same experience working with veterans as other VA mortgage lenders on this list.

New American Funding

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You may not have heard of New American Funding, but they are one of the best options for veterans with poor credit. Unlike many online lenders, New American uses an actual person to review the VA loan and underwriting.

So if your credit score is lower than expected, they will consider other nontraditional credit factors when reviewing your loan application. For VA loans, New American Funding will accept applicants with credit scores as low as 580.

New American Funding doesn’t publish their VA loan rates, so you’ll have to apply online to see what you qualify for. However, they do require a minimum down payment of 3%.

PenFed Credit Union

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PenFed Credit Union is a global credit union founded in 1933 and works with military and non-military customers. PenFed specializes in providing financial services to military forces and their families.

PenFed requires a minimum credit score of 650 but offers a $500 to $2,500 credit to help with closing costs. PenFed charges a funding fee of 1.4% to 2.3% of the loan amount, but you may be able to roll it into the VA loan.

The company doesn’t publish its exact mortgage rates on its website but offers 15-year fixed and 30-year fixed mortgages at competitive rates. It’s also possible to get a loan with no down payment.

PenFed provides financial assistance and resources to veterans and service members through the PenFed Foundation. It also caters to the needs of wounded warriors who need continued treatment.

North American Savings Bank

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North American Savings Bank’s (NASB) VA home loan program has helped more than 38,000 veterans and military families realize their dream of owning a home in the last ten years. So far, the VA loan lender has closed more than $12.8 billion in VA home loans. 

NASB assigns a dedicated loan officer to each applicant, and they underwrite new VA loans, refinance, and even jumbo loans.
The company doesn’t charge an origination fee and is open to working with veterans with bad credit to help them secure a home loan.

NASB doesn’t publish interest rates, but they use in-house processing and underwriting to accelerate the loan process. Most of NASB’s loan officers are veterans themselves and have deep insights into the VA loan process.

Guild Mortgage

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Guild Mortgage is a VA-approved lender that caters to military and non-military clients. This lender is an excellent option if you struggle with lower credit scores. For example, veterans with a credit score of 580 are eligible for a VA home loan from this lender known for its fast closing speed and no down payment.

Under the Homebuyer Express program, the company offers a 17-day closing guarantee, ideal for active service members short on time. In addition, the lender supports in-person and online mortgage applications.

NewDay USA

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Founded in 1998, NewDay USA is a veteran-focused lender specializing in VA home loans. To date, the lender has helped more than 75,000 veteran families buy homes. NewDay offers fixed-rate mortgages with 15-year or 30-year terms as well as mortgage refinancing while providing additional benefits.

You can save up to $3,000 in mortgage payments per year through the VA Streamline Refinance. The company offers a cash-out refinance equivalent to 100% of your home’s value. NewDay USA does not openly advertise its mortgage rates, so you would have to apply to find out. It’s also unclear if NewDay charges an origination fee as they don’t reveal their lender fees upfront.

What are VA loans?

VA loans are mortgage products backed by the Department of Veterans Affairs. These loans allow service members, veterans, and their surviving spouses to buy homes with little or no money down and avoid private mortgage insurance. In addition, VA loans feature some of the most competitive interest rates on the market.

Although conventional mortgage lenders issue VA loans, they’re guaranteed by the federal government. Unlike standard loans, VA loans provide 100% financing when buying a home. Eligible borrowers can use the VA loan to purchase or build a house, renovate a house, or refinance their mortgage.

The VA doesn’t offer mortgage financing directly, but it sets the qualifying standards and dictates mortgage terms. Qualified borrowers can then secure a mortgage from private lenders such as mortgage companies, credit unions, and banks.

There are several types of VA loans, and they’re all classified as non-conforming loans due to their flexible credit requirements, lower interest rates, and down payment waivers. However, VA loans carry no prepayment penalties, and the VA may provide some assistance if you’re unable to keep up with your monthly payments in certain situations.

Who qualifies for a VA loan?

Veterans with an honorable discharge and service members on active duty who meet the minimum requirements can qualify for a VA loan. Surviving spouses of veterans who died in active service are also eligible for VA loans.

To be eligible for a VA loan, you must meet three criteria:

Department of Affairs’ Basic Service Requirements

You’re eligible for a VA loan if you meet one or more of these requirements:

  •  More than 90 days of continuous active duty during wartime
  •  More than six months of active service during peacetime
  •  Six years of service in the National Guard or Reserves
  • You’re a surviving spouse of a veteran who died in the line of duty or from a service-related disability

Have a Valid Certificate of Eligibility

You need the above qualifications to secure a Certificate of Eligibility (COE). The certificate proves that you’re eligible for VA financing and provides details about your VA entitlement. 

First-time borrowers have full entitlement, allowing them to take out a VA loan without a down payment. It also guarantees the lender that the VA will pay 25% of any loan amount over $144,000 if you default.

Meet a Lender’s Credit Score and Income Requirements

When issuing VA loans, most VA lenders set a minimum credit score requirement of 620 to 640. They will also look at your income level and debt-to-income ratio to gauge your ability to repay the loan. Your income level primarily determines the amount of money you can borrow.

What credit score do you need to qualify for a VA loan?

Most VA loan lenders require a minimum credit score of at least 620 to qualify for a VA loan, while others prefer to see it closer to 640.

Each of the three leading credit agencies, Equifax, Experian, and Transunion, use the FICO index to calculate your credit score. However, subtle differences between the credit bureaus may lead to variations in the final credit score. For example, if your credit scores from the three bureaus are 653, 640, and 633, the VA lender will discard the highest and the lowest and use the middle credit score.

For this reason, you should get a credit report from each of the three agencies when applying for a VA loan. Sometimes credit reports contain errors that lower your credit score. Rectifying these errors can lead to a significant boost that could push you over the cut-off point or help you secure a better interest rate.

How to Apply for a VA Loan

Although applying for a VA loan may seem daunting at first, it becomes relatively straightforward once you understand the process. Here’s a simple six-step guide to the VA application process.

1. Determine Eligibility

National Guard and Reserves, current Active Duty, and veterans are eligible for a VA loan if they meet the required active duty dates, minimum active duty service, and wartime periods, as well as obtain a Certificate of Eligibility. 

You can apply directly through eBenefits at VA or request it through the mail by filling out form 26-18880 and attaching the supporting service documents. Your lender may also be able to apply on your behalf.

2. Choose a VA-Approved Lender

Not all lenders make a great fit when looking for a VA mortgage. VA loans can only be originated by lenders on the Department of Veterans Affairs’ shortlist. 

Secondly, some lenders specialize in conventional loans, while others are dedicated almost exclusively to the VA mortgage program. A VA specialty lender is more knowledgeable about the loan process, delivering a better experience most likely.

3. Get a Mortgage Pre-approval

Mortgage pre-qualification is necessary when buying a home with a VA loan. It lays the groundwork for a smooth application process while eliminating potential surprises down the road. During pre-qualification, you’ll speak with your potential lender about your credit history, income, marital status, employment, and other crucial factors.

The pre-qualification process may offer insights into what you can do to increase your chances of approval. A pre-qualification letter gives you a ballpark loan figure that you may be approved for later, helping to shape your house-hunting efforts.

Even though the letter doesn’t guarantee loan approval, it serves as a guideline to let you know where you stand. It also shows that you are serious and have already started the process with a lender when making an offer on a home. Of course, the lender will have to verify all the information you provided before processing the loan.

4. Find Your Ideal House

House hunting is the most exciting step of your VA loan application since it allows you to find your dream home. A pre-qualification letter lets you shop strictly within your price range to save time and avoid disappointment later. While any real estate professional can help you with this step, it’s best to work with someone familiar with the VA mortgage loan process.

Since the VA allows the seller to absorb specific fees and costs, a seasoned VA loan agent will help you negotiate these fees and potentially save some money. Once you agree, you can sign a purchase agreement and proceed with the VA loan application.

5. VA Appraisal

After submitting your signed purchase contract to your lender, they’ll request the VA to appraise the home. Again, you need a VA-certified appraiser since they’re familiar with the standards required for VA financing. A VA appraiser will ensure the house is valued correctly and corresponds to its current market value.

The appraiser will inspect the home to ensure it passes the VA minimum property requirements (VA MPRSs). However, a VA appraisal doesn’t negate a proper home inspection. Unlike an appraisal, a home inspection checks for defects, code violations, and property conditions.

The VA grants its appraisers ten days to complete the appraisal process barring any extenuating circumstances. Then, if the property is up to par and you meet all the loan requirements, you can proceed with the loan approval process.

6. Close the Sale

After the underwriter approves your loan, you can close the loan and move into your new home. The seller legally transfers the property over to you during the closing process. You’ll need to sign documents confirming that you understand and agree with the loan’s terms and conditions.

You’ll also need to pay the closing costs, if required, and provide proof of homeowner’s insurance. You can take possession of the house immediately after signing all the closing documents.

How do I get started?

If you’re interested in applying for a VA loan, you’ll need to find a VA mortgage lender and get prequalified first. Once your VA lender has verified your income and financial information, you’ll receive your pre-approval letter.

Now that you know what you can afford, you can begin looking for houses. Once you find the home that’s right for you, you can put in an offer and start the negotiation process. It’s a good idea to partner with a real estate agent who knows the ins and outs of VA loans.

When you’re under contract, the VA will appraise your property. If everything looks good, you are in the clear to close on your new home.

Jamie Johnson
Meet the author

Jamie Johnson is a freelance writer who has been featured in publications like InvestorPlace and GOBankingRates. She writes about various personal finance topics including student loans, credit cards, investing, building credit, and more.