1. A funding fee is usually part of a VA loan. The % of funding fee depends on a few factors: whether you've used your benefit before and what your down payment is (it can be 0%). The smaller your down payment, and the more you've used your benefit, the higher the funding fee will be.
You won't have to pay a funding fee if any of these are true:
You’re receiving VA compensation for a service-connected disability
You’re eligible to receive VA compensation for a service-connected disability, but you’re receiving retirement or active-duty pay instead
You’re receiving Dependency and Indemnity Compensation (DIC) as the surviving spouse of a Veteran
You’re a service member who has received a proposed or memorandum rating before the loan closing date that says you’re eligible to get compensation because of a pre-discharge claim
You’re a service member on active duty who, before or on the loan closing date, provides evidence of having received the Purple Heart
2. As long as your co-borrower is your spouse, or a non-spouse with a VA benefit, you don't have to worry about bringing more money to closing. If you are not married and want a civilian as your co-borrower, the VA will only provide benefit to cover your portion and the co-borrower would have to bring their funds for a down payment and closing costs. It isn't possible to do 0% down and no cash to close if there is a civilian non-spouse co-borrower involved.
3. The lowest eligible credit score is 550. Whereas conventional loans take the mid-score from the 3 credit bureaus, VA qualifies you based on the single lowest credit score on the credit report, which includes the co-borrower score. If the lowest score is lower than 550, you need to work with a credit improvement specialist to meet this threshold. I can refer you to one that specifically works with mortgage applicants if this is you.
4. VA loans are eligible for multi-family properties, i.e. 2-4 units, but you have to live in one unit. It's called owner-occupied status. You cannot use a VA loan to purchase a standalone investment property.
5. There are technically no loan limits to VA loans. There are only limits to how much the VA will guarantee. The VA will guarantee up to 25% of the loan amount for lenders in the event that you default on your loan.
6. While it's nice to have the 0% down option, this means you have a higher loan amount, therefore a higher mortgage payment. Most buyers can qualify for 0% down option, but the payment is higher than what they want to pay. I always recommend saving up some funds so you have the opportunity to lower your mortgage payment if you need to, whether it's to buy-down the interest rate or make a higher down payment.
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