Who is the best VA loan lender? That is a question that is hard to answer because not all borrowers have the same needs. You will want to tailor your search for a participating VA lender to suit your specific goals and plans for the home.

That is important because there is no one-size-fits-all home loan solution for ANY type of mortgage. You might want to purchase a condo unit, a typical suburban home, or a mobile home. Or you might want to build a house from the ground up using a VA One-Time Close construction loan, also known as a single-close construction loan.

There are many VA loan lenders. Some of the most highly visible among them include, but may not be limited to the list we are going to provide in this article.

• Veterans United Home Loans
• Navy Federal Credit Union
• USAA
• Quicken Loans
• NBKC Bank
• Who is The Best Lender For VA Loans?
• What Lenders do VA Loans?
• What is The Credit Score For VA Loans?
• How do I Choose a VA Mortgage Lender?
• What is The Current Interest Rate For VA Loans?
• Can I be Denied VA Home Loans?
• How do VA Loans Work?
• Are VA Loans Better Than Conventional Loans?
• How do You Qualify For a VA Loan?
• What Are The Down Payment Requirements For a VA Loan?
• VA Loan Lenders For Bad Credit
• Navy Federal VA Loan

Veterans United Home Loans

Veterans United specializes in VA loans but offers a wide range of mortgage products. Online conveniences and easily viewed rates make it a strong choice for military borrowers, but its rates and fees are higher than those from some other lenders.

Read Also: Va Loan Multi-Family

They offers service members, veterans and eligible reservists a broad array of loan products in addition to VA loans. Potential borrowers can easily find up-to-date rate information, reach customer service by phone any time of night or day, and apply online.

Pros

• Offers 24/7 customer service over the phone.
• Has online application and pre-qualification.
• Offers a free credit counseling service.
• Employs advisors from each branch of the armed forces.

Cons

• Doesn’t offer home equity loans or HELOCs.
• Veterans United has physical branch offices in only 18 states.
• Charges higher rates and fees than some other lenders.
• Information on FHA, USDA and conventional loans is harder to find on its website.

Navy Federal Credit Union

Navy Federal Credit Union (or Navy Federal) is a global credit union headquartered in Vienna, Virginia, chartered and regulated under the authority of the National Credit Union Administration (NCUA).

Navy Federal is the largest natural member (or retail) credit union in the United States, both in asset size and in membership. As of March 2021, Navy Federal has US $138.6 billion in assets and has 10.1 million members.

Navy Federal offers the typical suite of account services offered by most financial institutions, including savings accounts, checking accounts, debit cards, IRA accounts, and certificates.

The savings product is named “Share Savings” to reflect the fact that a member’s initial savings deposit ($5.00) literally represents their share of ownership in the credit union.

Navy Federal also offers members consumer loans (including personal loans, auto loans, and student loans), credit cards, mortgages and home equity lines of credit, and digital banking as well as some small business services, such as PPP loans. Navy Federal’s CUSO, Navy Federal Financial Group, offers more extensive investment services, an electronic trading platform, and insurance.

As of January 2021, Navy Federal has 343 branches worldwide. Navy Federal offers extensive online services via its corporate website, Navy Federal Online, and its banking app. In addition, members can make transactions through a network of more than 30,000 free ATMs in the U.S. and Canada without any surcharge fees.

Due to the nature of its membership, which includes actively deployed military personnel in every time zone, Navy Federal maintains 24×7 operations at its three contact centers in Vienna, Virginia, Winchester, Virginia, and Pensacola, Florida, its largest contact center, as well as round-the-clock online services.

Major banking competitors include Bank of America-Military Bank, Pentagon Federal Credit Union, and USAA.

USAA

The United Services Automobile Association (USAA) is a San Antonio-based Fortune 500 diversified financial services group of companies including a Texas Department of Insurance-regulated reciprocal inter-insurance exchange and subsidiaries offering banking, investing, and insurance to people and families who serve, or served, in the United States Armed Forces. At the end of 2017, it had 12.4 million members.

USAA was founded in 1922 in San Antonio by a group of 25 U.S. Army officers as a mechanism for mutual self-insurance when they were unable to secure auto insurance because of the perception that they, as military officers, were a high-risk group.

USAA has since expanded to offer banking and insurance services to past and present members of the Armed Forces, officers and enlisted, and their families. The company ranked No. 100 in the 2018 Fortune 500 list of the largest United States corporations by total revenue.

Quicken Loans

Quicken Loans LLC. is a mortgage lending company headquartered in the One Campus Martius building in the heart of the financial district of Downtown Detroit, Michigan. In January 2018, the company became the largest overall retail lender in the U.S. (it is also the largest online retail mortgage lender).

Unlike other large mortgage lenders that depend on deposits, Quicken Loans relies on wholesale funding to make its loans and uses online applications rather than a branch system.

Amrock and One Reverse Mortgage are also part of the Quicken Loans Family of Companies. The company closed more than $400 billion of mortgage volume across all 50 states from 2013 through 2017.

NBKC Bank

NBKC offers relatively low mortgage rates and fees, lets borrowers apply and track their loans online, and offers customized rates online. A large share of NBKC’s mortgages are Veterans Affairs loans. But construction loans and home equity lines of credit are limited to the Kansas City area.

BKC appeals to home buyers and refinancers who prefer an online experience when shopping rates and fees, and when applying, but who want the phone support to be available, too. It underwrites a lot of VA loans, and rates and fees are lower than most other lenders.

Pros

• Offers low rates and fees when compared with other lenders.
• Extends full online capabilities, from application to loan tracking.
• Displays customized rates, with fee estimates, without requiring contact information.

Cons

• Equity lines and construction loans are available only in the Kansas City metro area.
• Doesn’t offer renovation loans.

Who is The Best Lender For VA Loans?

VA loans can offer savings and a fast track to homeownership for borrowers with military service. This guide offers recommendations for the top VA lenders so you can find the best VA loan.

1. Carrington Mortgage Services

Carrington Mortgage Services makes a range of mortgages, including refinancing, available to borrowers nationwide. The company, which provides conventional and government-backed mortgages, has funded $22 billion in home loans since 2011.

Before You Apply

• Mortgage types: conventional, FHA, VA, USDA, ARM, Carrington Flexible Advantage, first-time buyers, refinancing
• Minimum FICO credit score: 500
• Maximum loan amount: $2.5 million
• Better Business Bureau rating: A+

2. Fairway Independent

Fairway Independent Mortgage Corp. is based in Madison, Wisconsin, and has funded billions of dollars in loans since the company began in 1996 – and more than $58 billion in 2020 alone.

The lender offers several mortgage products, including conventional, Federal Housing Administration, U.S. Department of Agriculture, U.S. Department of Veterans Affairs, and refinancing loans.

Fairway Independent Mortgage also provides jumbo loans for home purchases in high-cost markets, renovation loans, adjustable-rate mortgages, and reverse mortgages. Fairway is an independent mortgage company and serves as a mortgage broker and direct lender.

Before You Apply

• Mortgage types: fixed-rate, ARM, conventional, USDA/Rural Development, FHA, VA, jumbo, refinance, renovation, reverse mortgage
• Minimum FICO credit score: 580
• Maximum loan amount: undisclosed
• Better Business Bureau rating: A+

3. NBKC Bank

NBKC Bank is a Kansas-based mortgage lender. It originates home loans in all 50 states.

Before You Apply

• Mortgage types: conventional, fixed rate, ARM, FHA, refinance, VA, FHA Streamline Refinance, Refi Plus, VA Streamline Refinance
• Minimum FICO credit score: 620
• Maximum loan amount: Not disclosed
• Better Business Bureau rating: A+

4. Guild Mortgage

Guild Mortgage, founded in 1960, specializes in home loans and serves borrowers nationwide. The lender’s full suite of products includes conventional and government-backed mortgages and home renovation loans.

Before You Apply

• Mortgage types: conventional, FHA, VA, USDA, ARM, refinancing, renovation, jumbo
• Minimum FICO credit score: 620
• Maximum loan amount: $2 million
• Better Business Bureau rating: A+

5. Veterans United Home Loans

Veterans United Home Loans provides mortgages to veterans and military families in all 50 states and Washington, D.C., and specializes in VA loans.

Before You Apply

• Mortgage types: VA, VA jumbo, refinance
• Minimum FICO credit score: 640
• Maximum loan amount: $1.5 million
• Better Business Bureau rating: A+

What Lenders do VA Loans?

There are many VA loan lenders. Some of the most highly visible among them include, but may not be limited to the following list. What follows is NOT an endorsement of any individual lender:

• USAA Bank
• Navy Federal Credit Union
• Pentagon Federal Credit Union
• Veterans United Home Loans
• Veterans First Mortgage
• Quicken Loans
• PrimeLending
• LendingTree

Some companies, including Veterans United Home Loans, have either employed or partnered with ex-military members to help educate people on the value of owning a home, how to successfully apply for a mortgage loan, etc. Some companies may also offer credit counseling services and other programs to further assist future VA loan borrowers.

The company USAA has a different approach; this financial institution is specifically made to serve those seeking VA mortgages and other military-friendly financial services. VA home loans are said to make up more than 60% of the USAA mortgage portfolio, and this is a mortgage loan company that is not open to the general public outside of the military community.

Still other companies offer credit union services including VA, FHA, and conventional mortgages. One such company, Navy Federal Credit Union, offers something called Freedom Lock, which is essentially a mortgage loan interest rate lock commitment you can negotiate with a lender.

But while Freedom Lock is a fancy name for a typical interest rate agreement, the company’s Real Match Guarantee option isn’t so typical. This guarantee, when offered, means Navy Federal Credit Union will match an interest rate option offered by a competing lender.

That is a good example of the kind of home loan option you could find if you shop around for a VA mortgage lender long enough. Not all lenders offer the same advantages to a veteran borrower, which is why it pays to review many lenders.

What is The Credit Score For VA Loans?

A minimum credit score between 580 and 620 is typically needed for veterans and military personnel seeking a VA loan. At Freedom Mortgage, for example, they have similar minimum credit scores for VA loans:

• When you want to buy a home with a VA loan, they can often accept a minimum credit score as low as 600.
• When you want to refinance a home with an VA loan, we can often accept a minimum credit score as low as 550.

How do I Choose a VA Mortgage Lender?

Choosing the right VA-approved lender can make a big difference in your mortgage experience and outcome.

To help you with this important first step toward homeownership, here are some “dos” and “don’ts” to consider when selecting your lender.

1. DO make sure the lender is VA-approved.

Not all mortgage lenders have approval from the VA to originate and fund loans backed by the U.S. Department of Veterans Affairs. If you plan to use your home loan benefits, the lender you use must be VA-approved. That’s a basic requirement.

To find out if a lender meets that criterion, be sure to ask if they originate VA home loans before you start the application process. If you skip this step, you may end up well into the mortgage application process before you find out that a VA loan isn’t an option with your lender.

2. DO ask the loan officer if he or she services VA mortgages on a daily basis.

Asking this one question can separate the occasional VA lender from one that specializes in VA loans. Many approved lenders originate a variety of mortgage loans, with only a very small ratio of them being veterans’ loans.

A specialist makes VA loans day in and day out. Although any approved lender can process your loan, one that intimately understands the lender’s guidelines may be able to achieve success where other lenders may fail.

3. DO read the warning signs.

Certain red flags could indicate that your lender may not be as experienced in these government-backed loans as you’d like them to be. Here are some warning signs to look for:

• You’re not asked about your military service
• You’re steered away from the VA home loan benefits you’ve earned
• VA terms like “entitlement” and “eligibility” don’t roll off the loan officer’s tongue
• The loan officer doesn’t know basic VA guidelines by heart
• You get “I’m not sure” when you ask basic questions about your benefits

4. DON’T assume all VA-approved lenders are the same.

Not all VA-approved lenders are created equal. Some are more experienced in serving veterans than others. VA loan specialists process VA loans on a daily basis. The loan officers are very familiar with the guidelines and, more often than not, handle special situations unique to the military community.

These can include repeat use of home loan benefits, frequent relocations due to PCS and military retirement. One way to gauge experience of a VA-approved lender is to look for good ratings with reputable organizations like the Better Business Bureau. Another is to consider the number of years in business.

5. DON’T believe everything you hear.

Misconceptions can get passed along when someone is not 100% informed about the VA Loan Guaranty program. 

These myths – that the VA loan process takes longer than other loans; that multiple VA loans aren’t possible; that you can’t buy a home while overseas – keep eligible borrowers from using their hard-earned benefits. 

In reality, you may be able to use your VA home loan benefits over and over again, and, in certain situations, it’s possible to own two homes at a time. Interest rates are competitive with national rates, approval requirements are generally straightforward and there are exceptions to the occupancy guidelines if you are serving overseas. If you’ve heard something that doesn’t sound quite right, you may want to get a second opinion.

6. DON’T be strong-armed into a choice.

Have you ever been told that if your credit is pulled by more than one lender while shopping for a loan that it will hurt your score? Equifax, one of the major credit bureaus, explains on its website that in most cases it won’t.

According to the bureau, most credit scores are not affected by multiple inquiries from mortgage lenders within 30 days. In such cases, the multiple inquiries are treated as a single inquiry, having little or no impact on your credit score.

If you are feeling pressured early in the process to make a decision about a lender, know that it is your option to investigate the loan products and services of more than one company.

A good lender offers honest advice, a decent rate, reasonable fees and excellent customer service. Home loan benefits are earned, and a reputable VA-approved lender can help you understand what they are and how to use them.

What is The Current Interest Rate For VA Loans?

Because the federal government backs VA home loans, lenders have the luxury of charging competitively low interest rates. Eligible veterans and service members find that rates are generally lower with a VA home loan than a conventional mortgage.

The Department of Veterans Affairs (VA) doesn’t set interest rates. Your lender determines the rate on your VA loan based on your unique financial situation.

The table below brings together a comprehensive national survey of mortgage lenders to help you know what are the most competitive VA loan rates.

Product	Interest Rate	APR
30-Year Fixed Rate	3.060%	3.270%
30-Year Fixed-Rate VA	2.690%	2.860%
20-Year Fixed Rate	2.980%	3.160%
15-Year Fixed Rate	2.340%	2.640%
7/1 ARM	3.110%	3.830%
5/1 ARM	3.250%	4.020%
10/1 ARM	3.550%	4.120%
30-Year Fixed-Rate FHA	2.870%	3.730%
30-Year Fixed-Rate Jumbo	3.070%	3.170%
15-Year Fixed-Rate Jumbo	2.340%	2.410%
7/1 ARM Jumbo	3.240%	3.770%
5/1 ARM Jumbo	3.360%	3.950%

Rates as of Wednesday, May 05, 2021 at 6:30 AM

Can I be Denied VA Home Loans?

When you apply for home financing with a VA loan, you’re increasing your chances of being able to get into a great house. While most qualified veterans are able to qualify for financing, some will end up having their loan applications denied. Though it’s relatively rare, there are a few things that can influence the success of your VA loan application. Here’s what you need to know.

Your Income Matters

Whether you’re applying for home financing with traditional mortgages or VA loans, your income matters a lot. You need to be able to prove to the lender that you can afford the loan payments each month. If your VA loan application was denied, it could be because your income levels are too low.

The best thing you can do is ask your lender for clarification. They’ll be able to tell you if your income was too low. If so, look for ways to increase your income if at all possible. This will increase your chances of qualifying in the future.

The Property Might Not Meet Standards

If you’re using a VA loan, the property you buy must meet certain requirements. At a minimum, the property should be in livable condition with functioning electrical and plumbing systems.

If the property doesn’t pass inspection, you won’t be able to buy it. You must also be willing to use the property as your primary residence. If you’re trying to buy an investment property with a VA loan, the application will be denied.

Different Lenders Have Different Standards

VA loans are issued by individual lenders, not the VA. This means each lender is able to impose specific requirements for each borrower. If your personal credit score is too low for one lender or they deem your income too low, they’ll deny your application, but that doesn’t mean you won’t qualify for home financing at all.

Try getting quotes from different lenders. They may have more flexible requirements and may be willing to issue you a loan even when your first lender denies your application.

How do VA Loans Work?

VA loans work a bit differently than conventional mortgages. The Department of Veterans Affairs (VA) does not make or originate loans, but backs a portion of each loan against default. This backing, or guarantee, is what gives private lenders the confidence to extend $0 down financing and advantageous rates and terms.

However, from a process perspective, VA loans work fairly similar to most other mortgage options, but with a few caveats. A typical VA loan process works something like this:

1. Get Prequalified

Find a VA lender and prequalify to get an estimate of how much house you can afford based on your income, credit, entitlement and other financial factors. Prequalification is a basic first step that paves the way for a much more powerful step – VA loan preapproval.

2. Get Preapproved

Loan preapproval is a major step and puts you in the driver’s seat to spring into action when you find a home you love. Lenders will verify income and financial information to get a clear sense of your purchasing power.

The end result is receiving a preapproval letter. These letters show real estate agents and home sellers you’re a strong and serious buyer who has what it takes to get to closing.

3. Put in an Offer

When you and your agent find the perfect VA loan approved home, it’s time to craft an offer and negotiation a contract with the seller. It’s important to find a VA loan savvy agent you trust that also knows the ins and outs of VA loans.

4. Go Through the VA Appraisal and Underwriting:

Once under contract, your lender will order a VA appraisal of the property. The VA appraisal is not a home inspection, but a VA requirement to ensure the property meets fair market value and the VA’s minimum property requirements.

Around the same time underwriters will evaluate your income, financial and related documents along with the appraisal once it’s finalized. If everything checks out, you’ll be issued a clear to close and move on to your loan closing.

5. Closing:

You’ll sign all kinds of legal documents and paperwork at your loan closing and get the keys to your new home.

Are VA Loans Better Than Conventional Loans?

The primary benefits of VA loans are $0 money down, no PMI, flexible credit requirements and highly competitive rates. The VA loan might be a good fit for eligible veterans and service members without sterling credit or the ability to make a 20 percent down payment.

Conversely, borrowers with great credit and enough cash on hand for a large down payment may find that a conventional loan is a better fit.

VA Loans vs Conventional Loans: A Quick Comparison

VA Loans	Conventional Loans
Down Payment: $0	Down Payment: Up to 20% Down
Rates: Typically lower than conventional	Rates: Typically better than FHA, but higher than VA
Credit Standards: Not set by the VA, but typically lenders expect at least a 640	Credit Standards: Typically a 640 minimum, but much higher to get the best rates and terms
Occupancy: Can be used for primary residences only	Occupancy: Can be used for primary, secondary, investment property and even vacation homes
Program Fees: VA Funding Fee (1.4% – 3.6% of the loan amount)	Program Fees: No special fees are associated with conventional mortgages

Conventional loans feature no government guarantees and adhere to the standards and requirements of government sponsored enterprises Fannie Mae and Freddie Mac.

Credit benchmarks can vary by lender and loan type. A 640 FICO score is a common benchmark for conventional loans, although you may need a much higher score to contend for the best rates and terms.

Other differences include:

Down Payment

A flagship benefit of the VA loan is that most VA borrowers don’t need a down payment to secure financing.

Conversely, conventional loans often require a down payment of at least 5 percent (in some cases it might be 3 percent or lower). However, conventional borrowers with less than 20 percent down will pay private mortgage insurance (PMI) – a fee that is not required with VA loans.

To put that in perspective, a 5 percent down payment on a $300,000 loan is $15,000. Borrowers would typically need to put down $60,000 on that loan to avoid paying PMI.

Mortgage Insurance

As previously mentioned, conventional loans with less than 20% down will require private mortgage insurance (PMI). Depending on home price, your credit score and other factors, PMI can easily run $150 to $200 each month.

PMI protects the lender if you default on your loan and typically falls off after you reach 80% loan-to-value.

VA loans do not require PMI, saving the borrower thousands over the life of the loan.

Rates

VA loan rates are often the lowest rates on the market. According to the mortgage origination software firm Ellie Mae, through Q3 of 2019, VA loans have had the lowest average rates at 4.27 percent – compared to conventional at 4.5 percent.

VA loans are backed by the Department of Veterans Affairs, giving lenders the confidence to extend more favorable rates to borrowers who may not have perfect credit.

Credit Standards

The Department of Veterans Affairs (VA) does not set a credit score minimum on VA loans, but most lenders do. Similar to conventional loans, some lenders like to see a 640 or better mortgage credit score.

Also through Q3 of 2019, the average credit score for a VA purchase loan was 709 compared to conventional at 753 – showing you don’t need perfect credit to obtain a favorable VA loan rate.

Occupancy Requirements

A rather large difference between VA and conventional loans is that VA loans are only for primary residences. This doesn’t rule out duplexes or fourplexes, but to use a VA loan you must intend to live in the property you purchase.

However, conventional loans may be used to purchase primary residences, vacation homes, rental property and other investment property.

Loan Fees

VA loans come with what’s known as the VA funding fee. The VA funding fee ranges from 1.4 to 3.6 percent and is applied to every VA purchase and refinance loan.

The VA funding fee is often rolled into the entire loan amount to make for a true $0-down loan.

How do You Qualify For a VA Loan?

To be eligible for a VA loan, you or your spouse must meet the basic service requirements set by the Department of Veterans Affairs (VA), have a valid Certificate of Eligibility (COE) and satisfy the lender’s credit and income requirements.

You may be eligible for a VA loan by meeting one or more of the following requirements:

• You have served 90 consecutive days of active service during wartime, OR
• You have served 181 days of active service during peacetime, OR
• You have 6 years of service in the National Guard or Reserves, OR
• You are the spouse of a service member who has died in the line of duty or as a result of a service-related disability.

What Are The Down Payment Requirements For a VA Loan?

Conventional lenders require down payments of at least 3 percent, and more commonly lenders require 5 percent down or more. Borrowers with bad marks on their credit can struggle to qualify for conventional financing. A mediocre credit history can negatively affect interest rates and other loan terms available through conventional mortgages.

Ultimately, to get the best terms for the life of a traditional mortgage loan, borrowers may need excellent credit and to make a down payment in the 20-percent range. Unless borrowers put down such a large sum of money, their conventional loan will feature private mortgage insurance (PMI).

When you compare FHA loans to conventional mortgages, the government-insured loan does provide a much better down payment minimum of 3.5 percent.

But mortgage insurance for FHA loans is usually the highest in the housing market. Mortgage insurance figures into the monthly payments for the life of a loan, and it can make the loan substantially more expensive in the long run.

VA Loan Lenders For Bad Credit

Many borrowers want to know if a VA mortgage is possible with bad credit, and under what circumstances. There are several important things to know about VA home loans that will help you better prepare for your home loan application.

Read Also: VA Home Loan Specialist

Technically speaking there is no provision for bad credit home loans associated with the VA program. That does not mean that you are automatically barred from a home loan if you have less than perfect credit but it does mean you may, depending on the nature of your credit history, be able to qualify for a home loan with a bit of extra work.

What does that mean? For starters, everyone’s idea of “bad credit” is different, but in general, a lender will have a hard time justifying a home loan with the best terms for borrowers with FICO scores under 600, those who do not have a solid 12 months of on-time payments on all financial obligations at application time, and those who have a foreclosure or bankruptcy on their records that has not been fully discharged or settled.

Navy Federal VA Loan

Navy Federal has a military focus with an online application and easy-to-find rates, but the website does not offer customized rates based on credit score or other factors before you apply.

Navy Federal Credit Union offers a broad menu of mortgages, including no-down-payment home loans tailored to its members.

Founded in 1933, the credit union’s mission is to serve the military community. Veterans, active-duty military and their families are eligible for membership. U.S. Department of Defense civilian employees, retirees and some contractors can also join, as well as federal employees assigned to Defense Department installations.

The Vienna, Virginia-based credit union is the largest in the world, with more than 9 million members. It has more than $125 billion in assets, according to internal data.

Pros

• Offers a wide range of affordable mortgage products designed for military members.
• Has an online application for preapproval.
• Offers low rates compared with most lenders.

Cons

• The website does not provide customized mortgage rates based on credit score or other factors before you apply.
• Credit union membership is limited to veterans and current military members, their families, and certain federal employees, retirees, and contractors.