Funding fee
Most VA borrowers pay a one-time funding fee, which can be financed into the loan. The percentage varies by down payment, service type, and whether it is your first use of the benefit.
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VA loansVA loans for Iowa veterans and service members
The strongest loan program available to anyone, and the most underused. If you are eligible, it is usually worth a hard look before anything else.
Why the VA loan is different
Two features set it apart, and both are unusual. There is no required down payment for most eligible borrowers, and there is no monthly mortgage insurance regardless of how little you put down. On every other low-down-payment program, mortgage insurance is the price of entry. On a VA loan it simply does not exist.
That combination often makes the monthly payment lower on a VA loan than on a conventional loan with the same rate and a larger down payment. It is worth running the comparison rather than assuming.
Who is eligible
Eligibility generally extends to veterans, active duty service members, certain members of the National Guard and Reserves, and some surviving spouses. Service requirements vary by era and by type of service. The definitive answer comes from your Certificate of Eligibility, which a lender can usually pull electronically in minutes.
What it actually costs
Funding fee exemption
Borrowers receiving VA compensation for a service-connected disability are generally exempt from the funding fee entirely, which is a meaningful savings.
Closing costs
Standard closing costs still apply, though VA limits certain fees a lender can charge and restricts some costs from being passed to the buyer.
No prepayment penalty
You can pay the loan down or off early without penalty, which matters if you expect to refinance or sell.
Things worth knowing before you use it
- The benefit is reusable. Using it once does not exhaust it, and entitlement can often be restored after you sell.
- VA appraisals assess both value and minimum property condition requirements, similar in spirit to FHA.
- You generally must occupy the home as your primary residence.
- There is a streamlined refinance option, the Interest Rate Reduction Refinance Loan, with lighter documentation when you are lowering your rate.
- Some sellers and listing agents still hold outdated assumptions about VA offers. A lender who can speak to the listing agent directly often defuses that.
The most common mistake
Eligible buyers talk themselves out of it. Sometimes because an agent suggested a VA offer would be less competitive, sometimes because they assume they should save a down payment first. Neither holds up well under scrutiny. A VA loan with no down payment and no mortgage insurance frequently beats a conventional loan with money down, and a well-documented VA pre-approval is as strong as any other offer.
If you served and you are buying in Iowa, get the Certificate of Eligibility pulled and price it out. Then decide.
Common questions
Questions people ask
Do VA loans really require no down payment?
For most eligible borrowers using full entitlement, yes. There are situations involving partial entitlement or higher loan amounts where a down payment comes into play, which is why it is worth confirming against your specific Certificate of Eligibility.
Is there mortgage insurance on a VA loan?
No monthly mortgage insurance, which is one of the program's biggest advantages. There is a one-time funding fee for most borrowers, and it can generally be financed into the loan.
How do I get a Certificate of Eligibility in Iowa?
A lender can typically request it electronically on your behalf and receive it quickly. You can also request it directly through the VA. Having your DD-214 or statement of service available speeds it up.
Can I use a VA loan more than once?
Yes. The benefit is reusable, and entitlement can usually be restored after you sell a home financed with it. Some borrowers also carry two VA loans simultaneously in specific circumstances.
Are VA offers less competitive to sellers?
They should not be, though the perception persists. A strong pre-approval and a lender who will talk directly with the listing agent usually resolves it. VA appraisals do include property condition requirements, which is the legitimate part of the concern on distressed properties.
Next step
Talk it through before you commit
No cost, no obligation. Bring your questions and we will work out what actually fits your situation.
Phone: 712-830-0025
Email: bhaye@gokeymortgage.com
Office: 2370 NW 128th Street, Urbandale, IA 50322