In the past two years, the housing market has seen record-high prices and record-low property inventory. The remainder of 2022 may bring a slight cooling in prices, but Reuters has found that inventory is likely to remain low in most American cities. Because of this, the current housing market will probably stay competitive.

For veterans, this can be discouraging when looking to buy a house in a seller's market. Luckily, this is where VA loans can make a big difference. Let's dive into the ins and outs of government-backed loans for veterans. Here is everything you need to know! 

What are VA loans?

VA loans are for current service members as well as veterans and their eligible spouses. A VA loan is a mortgage that is guaranteed by the U.S. Department of Veterans Affairs. It can be issued by a private lender of your choice. This loan option has been available since World War ll when the GI Bill of Rights created the VA home loan program in 1944.

VA loans are beneficial for many reasons, but there are extra benefits in today's highly competitive housing market.

The appearance of U.S. Department of Defense (DoD) visual information does not imply or constitute DoD endorsement.The appearance of U.S. Department of Defense (DoD) visual information does not imply or constitute DoD endorsement.

What are the benefits of VA loans?

One of the main draws of a VA loan is that there is no down payment required in most cases. In 2022, the VA loan limit received a sizable increase, making it easier to get more out of a single loan. This year, the limit is $647,200 for most U.S. counties. As house prices remain high, this can help veterans and active service members find their ideal housing.

This loan type also requires no private mortgage insurance, even if the down payment is less than 20% of the original mortgage amount. Many other loans can be complicated to obtain because of this prerequisite. Veterans also have the opportunity to receive better rates and terms than with other mortgages.

How do VA loans work?

When it comes to finding the right loan for your needs, there is no one size fits all option. Luckily, there are several kinds of VA loans available for different types of circumstances. Here are some examples:

  • Purchase loans.
  • VA streamline refinance.
  • VA cash-out refinance.

Within this, there are two categories of VA loans. They are VA direct loans and VA-backed loans. Here are the differences:

  1. VA direct loans: These are loans that the borrower gets directly from the VA.
  2. VA-backed loans: In this case, the loan is issued by a third party and backed by the VA.

There is only one VA direct loan, which is the Native American Direct Loan available for Native American veterans buying a home on federal trust land.


The current housing market has made it hard for prospective buyers to get their dream homes. VA loans are here to take care of those who have served the country by helping them obtain fair housing options, something that is extremely valuable in today's hot housing market. Here are some of the eligibility requirements for securing a VA loan:

  • Must be an American veteran.
  • Must be an active duty service member.
  • Able to prove current or prior enlistment in the National Guard or Reserves.
  • Must be a surviving spouse of a veteran who passed from service-related injuries.

Your bank or mortgage lender will be able to guide you through the process and ensure that you can prove eligibility.