How to Know Which VA Loan to Choose

How to Know Which VA Loan to Choose

Finding the perfect home or land can be tricky.  Knowing which type of VA loan to select does not have to be.  Whether you need to make the property handicap accessible, want to add an accessory dwelling unit for aging parents, or turn unimproved land into a dream home; the guide below will help you choose the right VA loan based on your needs.

First you’ll find a comparison table that shares each type of VA loan with the benefits and how they compare.  Once you’ve finished looking through the table, scroll down to find explanations without all the financial and legal jargon and examples of when this type of loan makes sense.  And unlike a lending website, we’re an independent third party who receives no compensation for creating this content.  Our goal is to help Veterans and veteran families, so there is no bias towards one particular loan or another.

VA no down 

payment loan

VA cash out refinance VA IRRRLs VA renovation loans VA supplemental loans VA energy-efficient loans VA construction loans
No money down X X X X X
No income verification X X
Doesn’t require appraisal X
Borrow up to 100% of home value X X
Can be used to refinance X X
Buy and repair a home with one loan X X
For smaller home maintenance projects X X X
Use for “green” projects X X X
Has VA Funding Fee X X X X X X

Pro-tip:  If you are a disabled veteran, there is an exemption from paying the VA funding fee and most states offer you a property tax exemption.  You also have access to Specially Adapted Housing (SAH), Special Housing Adaptation (SHA), and Temporary Residence Adaptation (TRA) grants. 

VA No Down Payment Loans

You can use this loan to buy a single-family home (up to 4 units like a fourplex), a condo, or a manufactured home. One of the more unique features about the no down payment VA loan is that you can assume (take over from another person) a VA-backed home loan.

A VA no down payment loan offers benefits including:

  • No down payments
  • Low interest rates
  • Able to borrow up to Fannie Mae/Freddie Mac conforming loan limits
  • No private mortgage insurance (PMI) or mortgage insurance premiums (MIP)
  • Fewer closing costs
  • No penalty fees if you pay the loan off early

VA Cash Out Refinance

The VA cash out refinance loan lets you use the equity in your home even if your current mortgage is not a VA loan!  The cash out refinance loan can be used to convert your home loan into a VA mortgage with all its benefits and also get cash-back at closing.

You can use your equity to:

  • Pay off liens and debt 
  • Pay for school/college
  • Make home improvements
  • Refinance non-VA loans into a VA loan


If you have an existing VA home loan, a VA IRRRL changes the terms of your loan to provide you with an immediate financial benefit like a lower interest rate or lower monthly payment.  This loan is a good fit for anyone who has an adjustable rate mortgage or who has fallen behind on their mortgage payments.

The VA IRRRL is also the quickest and easiest loan to use if you want to refinance and don’t want to take out any cash.

VA Renovation Loans

If you’ve found the house of your dreams but it needs a little TLC, a VA renovation loan allows you to roll the repair costs and purchase price into a single loan with one monthly payment.  There is a catch.  All repairs need to be completed by a VA registered contractor which means you can’t do the work yourself and everything must be completed within a specific set of time.  This can be limiting if there are not enough approved contractors in your area.

VA Supplemental Loans

The VA supplemental loan is perfect for anyone who already has a VA loan, is currently living in their home, and just needs to make a few repairs and/or improvements.  This loan can be used on expensive repairs like a leaky roof or just to maintain your home.  

Pro-tip:  If you borrow less than $3,500 with this loan, you do not need an appraisal.

VA Energy-Efficient Loans

VA Energy Efficient loans (EEM) helps homeowners to finance the cost of energy-efficiency improvements of any size and can be used with a home purchase loan or with a refinance loan.

Some allowed energy-efficient improvements are:

  • Installing solar heating and cooling systems
  • Adding new insulation (ceiling, attic, floor, etc.) 
  • Storm windows and/or doors 
  • Furnace efficiency modifications
  • Heat pumps
  • Installing a solar water heater
  • Caulking and weather-stripping
  • Adding digital thermostats 
  • Installing vapor barriers in a home

Pro-tip:  These home improvements do not have to be done by a VA-approved contractor.

VA Construction Loans

A VA construction loan is a short-term loan that allows you to purchase land and build your dream home as your primary residence.  Once construction is done, you can convert this loan to a permanent VA loan.

VA loans make home ownership more affordable with low interest rates and no money down.  Since every veteran’s situation is different, there are many different types of VA loans to choose from.  And now you have the information you need to find which VA loan is right for you and your situation.  

Get More Tips Like These

If you like this post, you'll love our monthly newsletter! You'll get a new theme with ideas for your real estate business from marketing tips to legal advice. Subscribe today!

Get An Instant Quote!