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Best VA loan lenders of October 2024

Hal Bundrick
Updated 14 min read

VA loans are undoubtedly among the best bargains in home financing. Backed by the U.S. Department of Veterans Affairs and issued to borrowers with military service connections, a VA mortgage allows no down payments on most loans, a limit on closing costs, and no private mortgage insurance requirement.

However, not all VA lenders are the same. Rates, fees, and services vary from one lender to another. Combining the amazing advantages of a VA home loan with an outstanding lender will enhance the value of your well-deserved military benefit.

Yahoo Finance has done the research on national lenders offering VA loans. We've poured through the federal records of lender practices — interest rates, total lender fees, and other affordability factors — and have determined the best VA mortgage lenders for you to consider.

Learn more: The best types of mortgages for first-time home buyers

Navy Federal logo 4.2/5 stars

Stars: 4.20

Read our full Navy Federal Credit Union mortgage review

Key benefits

  • The No-Refi Rate Drop offer allows you to snag a lower interest rate six months or later after closing — for a $250 fee — without additional closing costs or changing your loan terms.

  • A rate guarantee states that Navy Federal will match a better mortgage rate offered by a competing lender on the same loan or pay you $1,000 after you close with the other lender.

  • The Special Freedom Lock allows an interest rate reduction of up to 0.50% if rates move lower before your loan closing, which is just one feature that makes Navy Federal one of the best mortgage lenders for first-time buyers.

  • Military Choice loans allow benefits similar to VA mortgages to current and former service members without further entitlements.

  • Buy your home through a Navy Federal real estate agent partner and receive $400 to $9,000 cashback.

Need to know

Pennymac logo 3.8/5 stars

The Yahoo view: As the nation's second-largest VA lender by loan volume, Pennymac is an obvious choice for military-related borrowers, especially for those looking to refinance a VA loan.

Stars: 3.80

Read our full Pennymac mortgage review

Key benefits

  • If rates go down after you close a home loan with Pennymac, get a $2,000 credit toward closing costs when you refinance within three years.

  • A Pennymac Pre-Approval shows home sellers that you are a serious — and credit-qualified — buyer. Plus, you will receive a $1,000 credit to apply to your closing costs.

  • Pennymac often services the loans they issue.

Need to know

  • Pennymac has a below-average rating for customer satisfaction, according to the 2023 J.D. Power Mortgage Origination Satisfaction Study.

PenFed Credit Union logo 3.6/5 stars

The Yahoo View: Pentagon Federal Credit Union, or simply PenFed, is a VA loan behemoth with a deep well of resources for home buyers and homeowners looking to refinance.

Stars: 3.60

Read our full PenFed Credit Union mortgage review

Key benefits

  • PenFed has a significant library of educational tools, including eBooks and a quick quote tool that estimates your mortgage rate based on your property and personal details.

  • Open membership allows anyone to join by starting a savings account with a $5 deposit.

Need to know

  • PenFed's origination fee is capped at $995.

  • Its quick quote mortgage rate tool requires you to provide contact information.

  • Advertised rates are based on a stiff 760 credit score.

USAA logo 3/5 stars

The Yahoo View: USAA is a well-known national provider of financial services to the military community. It offers some unique advantages for home buyers, including no mortgage origination fee.

Stars: 3.00

Read our full USAA mortgage review

Key benefits

  • USAA charges no origination fees on VA loan products.

  • Offers VA and conventional loans.

Need to know

  • USAA only has branch offices in Colorado, New York, Maryland, and Texas.

  • Doesn't offer home equity loans or lines of credit.

Veterans United Home Loans logo 3.2/5 stars

The Yahoo view: Veterans United is unparalleled in customer service ratings, but Yahoo Finance found the mortgage lender’s interest rates to be higher than the median of many other lenders.

Stars: 3.20

Read our full Veterans United mortgage review

Key benefits

  • Offers 24/7 customer service that reflects the international nature of military service.

  • Veterans United received the highest score among all lenders considered in the 2023 J.D. Power Mortgage Origination Satisfaction Study.

  • Has ample educational resources for first-time home buyers, including a home-buying book and web course, on a clean, easy-to-navigate website.

  • Provides counseling for potential borrowers who are looking to improve their creditworthiness.

Need to know

  • Veterans United's interest rates are generally higher than the median rates of many other VA lenders, according to a Yahoo Finance analysis of 2023 Home Mortgage Disclosure Act data.

The best VA lenders will:

  • Help you confirm your eligibility. (See "Certificate of Eligibility" below)

  • Walk you through the loan process before it begins.

  • Explain mortgage terms as you encounter them.

  • Assist you in completing a loan application.

  • Walk you through the timeline to closing.

  • Offer you a competitive combination of a low interest rate and limited fees.

  • Understand and appreciate the fact that you'll want to shop multiple lenders.

Yahoo Finance tip: VA loan qualification standards do not set minimum credit score requirements to buy a house, but lenders may establish their own eligibility requirements. And VA-backed mortgages do not have set interest rates. So, lenders may require a minimum credit score, and mortgage rates vary widely from one lender to the next. That's why it is important to shop for more than one lender.

VA loans are an exclusive benefit for members of a U.S. branch of military service or veterans. Eligible surviving spouses can also qualify. Government home loans administered by the Department of Veterans Affairs, VA loans have unique benefits and flexible approval guidelines. VA loans also allow plenty for a buyer to negotiate: Sellers can pay for discount points, closing costs, or offer any other cash concession up to 4% of the loan amount.

Learn more: What is a VA loan?

The best VA home loan lenders will offer the full slate of VA mortgage types. They’ll also offer options for VA mortgage refinancing, which we’ll cover a little later. Here are your options for VA loan types:

Buying a home with a VA loan allows most borrowers to qualify without making a down payment. It's a lifetime benefit that can be tapped again and again. A VA loan can be used to purchase a single-family home, townhouse, manufactured home and lot, or a multifamily development with up to four units.

Dig deeper: 12 popular types of houses

This is a type of purchase loan program designed for buyers interested in condominiums. VA-backed loans have specific guidelines for the types of condos that will be approved.

A VA fixed-rate mortgage has an interest rate that does not change for the life of the loan. Terms typically range from 15 to 30 years.

A VA adjustable-rate mortgage begins with an introductory rate and then varies at pre-determined intervals. For example, a 5/1 ARM keeps your rate the same for the first five years before changing your rate once per year.

With a VA EEM, you can make up to $6,000 worth of energy-efficient upgrades to your home. This loan is combined with a purchase mortgage or a streamline refinance (IRRRL) and closes on the same day. So, it takes a little planning ahead but can add value to a fixer-upper you are buying or to your existing place as part of a streamline refinance.

Much like the Energy Efficient Mortgage, the VA Alteration and Repair loan is a piggy-back mortgage that provides funds for renovation to a property at the same time it is being purchased or refinanced.

With housing inventory so meager, many would-be homeowners are considering building a new home. A VA construction loan can fund the building of the house and even the land it sits on. One caveat: A construction loan cannot be used to purchase a new home built and for sale by a developer. You would use a regular VA purchase loan to buy that house.

If farm living is the life for you, the VA Farm Residence loan may just be the ticket. The mortgage can be used to buy, build, renovate, or otherwise improve a farm residence. However, it can't be used to fund a farm business, equipment, or livestock.

These days, with higher mortgage rates, assumable mortgages can be your superpower. As a VA-qualified buyer, you can buy a VA-financed home from a seller — who very likely may have an attractively low interest loan rate. You get the home and the low mortgage rate. You'll likely have to pay the existing homeowner a decent price for the home, including their home equity, but that low mortgage rate will serve up significant savings for years.

Under this program, homes located on Federal Trust Land by a Native American veteran or eligible spouse might qualify for a purchase loan or refinance. The definition of Native Americans includes federally recognized tribes and nations as well as traditional Pacific Islander communities.

Refinancing is the process of lowering your mortgage rate by replacing it with a new loan. The VA offers two primary refinancing options.

IRRRL, pronounced "Earl," is the VA streamline refi mortgage. Simpler and faster to qualify for and close, it is the most popular refinancing option offered by the VA. Use it when current mortgage rates have fallen to lower your monthly mortgage payments or shorten the payoff on your loan.

Read more: How a VA streamline refinance (VA IRRRL) works

A cash-out refinance loan taps your home equity with a new mortgage. It's particularly beneficial when interest rates have fallen below your current loan's annual percentage rate (APR).

Learn more: How a VA cash-out refinance works

Getting a VA home loan is nearly identical to qualifying for a conventional mortgage or any other type of loan. There is lots of paperwork and plenty of documents to exchange, and it can seem that the whole process takes forever.

But you don't want to take any shortcuts.

Talk to three or four lenders. Get an idea of what it will take to qualify with them and get a mortgage preapproval. You'll receive a Loan Estimate, a short document outlining the expected terms and interest rate you will be eligible for. But remember, this is not a binding agreement.

You'll want to pay attention to any origination fee, other lender and third-party fees, and the loan's estimated APR. Circle that monthly payment and make sure you're good with it. Do this with each lender, and with a preapproval letter in hand, shop for your new place. When a purchase agreement is signed, select your preferred lender and apply for an official mortgage approval.

Four to six weeks later — if everything goes as planned (even though there's likely to be a bump or two along the way) — you'll close on the house.

Enjoy that cup of coffee in your new place, homeowner.

Learn more: How to get a mortgage

While VA loans have no mortgage insurance requirement, they do charge an upfront VA funding fee. Alas, there are few free rides. But look on the bright side:

  • VA funding fees can be waived for certain borrowers.

  • It can be paid by the seller, lender, or anyone else you can convince.

  • You can roll the funding fee into your mortgage if you're short of cash.

Read more: What is the VA funding fee, and how much does it cost?

Borrowers do not have to pay a VA funding fee if they are:

  • Receiving VA compensation for a service-connected disability.

  • Entitled to receive VA compensation for a service-connected disability but instead receive retirement or active service pay.

  • An un-remarried surviving spouse of a veteran who died in active service or from a service-connected disability.

  • A service member with a proposed or memorandum rating from the VA eligible for compensation due to a pre-discharge claim.

  • On active duty and has been awarded the Purple Heart.

Learn more: How the VA funding fee exemption works

A VA Certificate of Eligibility is required to qualify for a VA mortgage. Most lenders can download the certificate from a government system, which will help you acquire your COE. You can also get it yourself from the VA eBenefits website.

Read more: What is a VA Certificate of Eligibility (COE)?

We considered the following mortgage lenders providing VA loans for our best-of list, but they weren’t quite as strong as our top picks:

If you’re considering using a bank as one of the mortgage lenders competing for your business, the best bank may be the one you already use. Banks sometimes offer benefits to home buyers who are already customers. For example, one of our best VA lenders is U.S. Bank, which offers its customers closing costs credits of up to $1,000.

Veterans United is the top VA mortgage lender in America by loan volume, according to 2023 Home Mortgage Disclosure Act data. It also had the highest customer satisfaction score in the 2023 J.D. Power Mortgage Origination Satisfaction Study. Yet, other factors, including higher-than-median interest rates, kept Veterans United from winning the Best Overall VA Lender award from Yahoo Finance — we chose Navy Federal Credit Union.

Our overall pick for the best company to use for a VA loan is Navy Federal Credit Union. NFCU garnered the highest marks for lower-than-median interest rates and loan costs. Those are two of the most critical factors in choosing a mortgage lender. However, shopping multiple lenders can help you get the best deal on what undoubtedly will be one of the largest debts you'll ever assume.

Your VA loan interest rate will depend on various factors, including which mortgage lender you choose. According to Zillow data, 30-year VA loan rates dropped below 6% in July 2024, staying closer to 5.75%. The 15-year VA loan rates have stayed around 5.20%. The 5/1 VA ARM rates have been just under 6%.

Interest rates constantly change; however, Yahoo Finance analyzed 2023 Home Mortgage Disclosure Act data to determine which VA lenders offered the best rates. Of the lenders we reviewed in this best VA lenders list, Navy Federal Credit Union, Pennymac, PenFed, and USAA had 5-star scores for the lowest interest rates. To get the most competitive interest rate, we urge you to shop at several lenders, ask for a Loan Estimate with zero discount points, and have the lenders compete for your business with a combination of the best interest rate and lowest fees.

Yes, shopping with different mortgage lenders for your VA loan is always a good idea. Get preapproval letters for three or four lenders to see which offers you the best deal.

Yahoo Finance identified the best mortgage lenders for VA buyers by analyzing and grading leading national lenders, which were compiled and sorted by VA loan volume from 2023 Home Mortgage Disclosure Act data. The lenders were then scored on a quintile scale for five criteria: the median interest rate offered to borrowers, rate transparency, median fees and loan costs, affordability factors including loan offerings and down payment assistance, and online educational resources and calculators featured on lender websites.

A review of the Nationwide Multistate Licensing System’s data on regulatory actions enabled a 10% penalty to the score of any lender with a mortgage-related administrative or enforcement action within the past five years.

This article was edited by Laura Grace Tarpley.