What is not required for a VA loan?

A VA loan is a type of mortgage specifically designed for eligible veterans, active-duty service members, and certain members of the National Guard and Reserves. One of the key benefits of a VA loan is that it does not require private mortgage insurance (PMI) or a mortgage insurance premium, which is typically required for conventional loans with a down payment of less than 20%. This significantly reduces the overall cost of the loan for veterans and active service members compared to other types of mortgages.

In contrast, a Certificate of Eligibility is essential for verifying eligibility for the VA loan benefit, and the property must serve as the borrower's primary residence. Additionally, while VA loans do not have a strict total debt ratio requirement like many conventional loans, there is still an assessment of the borrower’s ability to repay through other metrics. Therefore, the absence of a requirement for mortgage insurance premium highlights one of the distinct advantages of financing through VA loans, making them a favorable option for qualifying individuals.