What’s the best lender for a VA loan?
The best VA lender should offer a combination of low interest rates, affordable lender fees, and great customer service. As importantly, it should have an in–depth knowledge of VA loans to help you through the application process.
Our top picks excel in all these areas. But the one at the top of the list won’t necessarily be best for you. You should compare personalized quotes from at least three VA loan lenders to make sure you’re getting the best deal available.
|Average Customer Review Score (out of 5)1||Minimum Credit Score for VA Loan||Best Feature(s)2|
|Freedom Mortgage||4.5||550||Lowest average VA rates (tie), flexible credit minimums, low fees|
|Guild Mortgage Co.||5.0||600||Best customer service (tie)|
|Guaranteed Rate||4.6||620||Lowest average VA rates (tie)|
|New American Funding||4.9||580||Excellent customer service, low average VA rates|
|Cross-country Mortgage||4.9||No Minimum||Flexible credit minimums, excellent customer service|
|Veterans United||4.8||640||Free credit counselling for poor-credit applicants|
|American Pacific||5.0||640||Best customer service (tie), low average VA rates|
|American Financial Network||4.9||Not Listed||Low average VA rates, excellent customer service|
|Stearns Lending||4.9||580||Excellent customer service, low average VA rates|
Important note on today’s VA loan rates
This review looked at each lender’s average 30–year VA loan rates from 2020, the most recent data available on public record. These averages should give you an idea of how competitive each lender is.
However, it’s important to shop for your best rate. Don’t just use averages and advertisements; actually get pre–approved with multiple lenders and compare their offers side–by–side.
It takes a little work, but homeowners who shop for their mortgage lender can easily save thousands of dollars.
The 9 best VA mortgage lenders
Remember, the best VA lender is different for everyone.
To find yours, pick 3–4 companies that stand out to you, then request rates to see which one can offer the best deal for your situation.
Based on its name alone, you may think it’s appropriate that we chose Freedom Mortgage as our best VA loan lender. But the name had nothing to do with it.
We picked Freedom Mortgage because it had the lowest average VA loan rates and closing costs of any lender on our list.
As importantly for some, it had the lowest credit score threshold as well. With Freedom, it’s possible to be approved for a VA loan with a FICO score of 550 or higher. And that really is exceptionally low.
Freedom specializes in VA loans, which means it has a depth of expertise that can help if your mortgage application is particularly challenging. Indeed, in 2020, Inside Mortgage Finance magazine named it the No. 1 VA lender in the nation.
Of course, nobody’s perfect, including Freedom Mortgage. Its customer review scores were a little lower than some on this list, averaging 4.5 out of 5 across multiple review forums.
Still, you may not care, given the considerable cash savings you might see through Freedom’s ultra–low mortgage rates and loan costs. We’d recommend getting a quote to see how good a deal this lender can offer you.
2. Guild Mortgage Co.
Guild can’t match Freedom for average VA loan rates or loan costs. But that doesn’t stop its customers from loving it.
Guild tied in first place in our survey of online customer review scores with a perfect 5.0 out of five.
It’s also sensible about minimum credit scores. True, there are others with lower thresholds on our list. But its 600 minimum score won’t cause headaches for most borrowers.
Note that, at the time of writing, Guild can’t lend in New Jersey or New York. So move on if you’re planning to buy a home in either of those states.
If you prefer working digitally, Guild has a helpful website and a fully online application. But there’s always human support from a loan officer if you get stuck or have a query.
And look out for some special Guild Mortgage features, including Homebuyer Express, which is a 17–day closing guarantee, and Lock and Shop, which holds your quoted rate steady for 90 days while you find your next home. Check the company’s website for more details.
Now you’re beginning to see why Guild’s customers love it so much.
3. Guaranteed Rate
Guaranteed Rate tied with Freedom Mortgage for the lowest average VA loan rate of all those on our list. And its average loan costs were the second lowest in 2020.
For many, that alone will secure it a place on their short list. Remember, a low rate means low monthly mortgage payments and long–term savings. You may well find that irresistible.
So why isn’t Guaranteed Rate higher on our list? Well, its scores for online customer reviews were only slightly better than Freedom’s, which means they’re second from bottom among our nine best VA loan lenders. And you need a 620 credit score to stand a chance of your application being accepted.
Do those bother you? Most borrowers probably won’t care, given the potential savings on offer. And Guaranteed Rate certainly has plenty of other things to recommend it.
For example, it has excellent digital services to apply and get approved fully online. But, if you prefer the personal touch, Guaranteed Rate also has 300 branches spread across 46 states. And you can always call for support, advice, or to get started with your application.
4. New American Funding
New American Funding (NAF) is a famously fine lender. It has great technologies that allow you to manage your loan application online. And it’s happy to work with VA borrowers with credit scores as low as 580.
In addition, New American Funding beats the industry average by a mile for lending to minorities, especially Hispanics (it’s bilingual in English and Spanish). And it has a program that reaches out to Black communities to encourage homeownership among them.
Significantly, in 2019, the Better Business Bureau (BBB) award NAF its top award for ethics. Needless to say, it’s a BBB accredited business with a top A+ ranking.
Although its average VA loan rates were a little higher than most, you might well find that NAF offers you your best deal if you request a quote. Its loan costs that year were mid–range.
Note that NAF doesn’t operate in Hawaii, so you’ll have to look elsewhere if you want to buy in that state.
5. Cross-country Mortgage
Cross-country is another lender with near–perfect scores in online customer reviews. And it may be particularly attractive to you if your credit score is less than perfect.
That’s because Cross-country doesn’t set a minimum credit score for VA loans. It may be prepared to work with applicants whom other lenders reject out of hand – provided you have a good reason for the low score and have cleared up any past issues in your credit history.
Don’t expect miracles. But you may have a better shot than with any other lender on this list.
And that goes for everyone, not just those with damaged credit. Cross-country places great emphasis on building strong relationships with its customers.
The company’s average VA loan rates in 2020 were mid–range. But its average loan costs that year were pretty high. Of course, you won’t know how competitive an offer you can get unless you apply to Cross Country. If you’re a strong borrower, you may be pleasantly surprised.
To top things off, the company says it can close most loans in as few as 21 days.
6. Veterans United
You may well feel at home with Veterans United. As the name implies, it’s dedicated to helping veterans and service members and has a distinctly military feel. And it’s a giant in that field. Using VA data, it says that it was the No. 1 VA lender for home purchase loans in 2020.
But it’s not for all service members and veterans. Because it has one of the highest credit score requirements on our list: 640.
However, Veterans United does offer free credit counselling to help those who can’t currently reach that threshold.
Veterans United’s average VA loan rate in 2020 was the highest on our list at 3.06%. And that’s a surprise, given that high credit score threshold. But its loan costs that year were lower than most.
VU earned an average review score of 4.8 out of 5 on customer review forums, and took a respectable third place in J.D. Power’s 2020 mortgage satisfaction study.
If it’s VA expertise you’re looking for, Veterans United may well be your best bet. Just compare rate quotes from a few other lenders to be sure you’re getting a good deal on your new loan.
7. American Pacific Mortgage
American Pacific Mortgage (APM) tied with Guild for first place for online customer review scores. It had another perfect 5.0.
Some of its popularity may be down to its competitive rates. However, its average loan costs were higher than most on our list. And its threshold for credit scores was the equal highest at 640. But, of course, credit score thresholds only bother those who can’t reach them.
APM says it is “known for valuing human connections.” So expect to work closely with one of its 1,400 loan officers nationwide, either by phone or in one of its 200 branches across the country.
8. American Financial Network
American Financial Network (AFN) may not be a familiar name to you. But it’s certainly earned its spot on our list of the nine best VA loan lenders.
AFN has the second–lowest average VA rates on our list and a near–perfect 4.9 for online customer review scores.
True, its average loan closing costs were mid–range in 2020. But there were several that were higher.
AFN says it’s one of the fastest growing mortgage bankers in the United States. And you can see why. It offers VA loans in all 50 states and has 141 offices employing 357 mortgage experts.
That may make it one of the smallest operations on our list. But don’t let that scare you off. With a sterling track record for customer service and competitive VA loan pricing, this lender is worth a closer look.
9. Stearns Lending
Stearns Lending is another fine lender. It had slightly above–average VA loan rates and high loan costs, but that may be a result of it welcoming borrowers with credit scores as low as 580. That often does skew averages.
Certainly, Stearns scores very highly in online customer reviews. So it must be doing a whole lot right.
Some of that may be down to the lender’s technology, which delivers all the functionality you could wish for across all devices (there’s even a mobile app).
As with some others on our list, Stearns isn’t forthcoming about its VA rates on its website. You’ll need to apply to get some idea of what you might pay. But that’s not always a bad thing. Many borrowers are fed up with lenders who tease them with low advertised rates only to tell them later they qualify only for higher ones.
So you may well wish to add Stearns to your short list. As we keep saying, any one of our Top 9 might offer you personally your best deal, regardless of historical averages.
How to choose a VA lender
Here are some tips for choosing your ideal VA lender:
- Start with prequalification – Getting prequalified helps you understand whether you’re eligible for a home loan, and how much you might be able to borrow, before you start house hunting
- Pick lenders that work with borrowers like you – If you have a low credit score or a troubled financial history, look out for ones with low credit thresholds
- Get multiple quotes – Don’t just choose one lender you like the look of. Request quotes from a number of lenders; the more the merrier. Shopping around in this way can easily save you thousands
- Compare your quotes carefully – Mortgage quotes now come as standardized Loan Estimates. You can use these to compare interest rates, loan terms, closing costs, and monthly payments on each offer, then choose the best one for you
Also, ask plenty of questions. Lenders often don’t list all their loan products online, so there could be hidden perks you’re not aware of from doing online research.
Ask each lender:
- What VA mortgage products do you offer? (Adjustable–rate mortgages, condo loans, VA manufactured home loans, VA construction loans, etc.)
- What are your VA refinance loan options?
- What are your rules for a VA cash–out refinance?
- Do you offer 100% VA cash–out refinancing?
- Do you offer the VA Interest Rate Reduction Refinance Loan (a.k.a. ‘IRRRL’ or ‘VA Streamline Refinance’)?
- Is IRRRL refinancing available without a new credit check or home appraisal?
- Are any of the loan origination fees negotiable?
If all this sounds too time–consuming, remember the sums that are at stake. You might save thousands of dollars by investing a few hours of time.
Finding the lowest mortgage rate also reduces your mortgage payments. This can create more financial stability, especially for first–time home buyers.
That’s what the VA loan program is all about anyway.
Is a VA mortgage always better than a conventional mortgage?
Every borrower has different needs. But military families should always consider the benefits of a VA loan before applying for a conventional mortgage – especially those who are new to home buying.
Some of the most obvious benefits of a VA mortgage include:
- No down payment – Eligible service members and veterans can qualify for a VA mortgage without any down payment, unlike conventional loans and FHA loans
- No PMI – Most borrowers have to pay private mortgage insurance (PMI) if they put less than 20% down. This can cost a few hundred dollars extra per month. But VA borrowers never pay PMI, only a one–time funding fee which can be rolled into the loan amount
- Lower credit score requirements – Our best–of list includes several lenders that will issue mortgages with FICO scores starting in the 500s. If your credit history isn’t stellar, you may still qualify for a mortgage through the VA loan program
- No loan limits – As of 2020, there is no limit to the amount you can borrow with a VA loan. However, you need to qualify for the loan based on income, credit and debt, so extra–large loans are still tougher to get
In almost every case, a VA mortgage loan will provide the most value for home buying and refinancing, provided you meet eligibility requirements.
VA loan eligibility requirements
The VA’s certificate of eligibility kicks off the VA loan underwriting process. This document verifies your VA eligibility based on your military service history.
Lenders can help you get your COE in just a few minutes. Or you can retrieve it yourself from the Department of Veterans Affairs benefits portal.
Service requirements for getting a COE include:
- Serving on active duty in the Air Force, Army, Coast Guard, Marines, or Navy, for 90 consecutive days during a time of war
- Serving on active duty in the Air Force, Army, Coast Guard, Marines, or Navy during peace time for 181 consecutive days
- Serving in the National Guard or Air Force or Navy Reserves for six years
Surviving spouses of service members killed in the line of duty can also qualify for a VA home loan.
The COE tells lenders you’re eligible for a VA loan. But you still have to meet the lender’s requirements for employment, credit, debt–to–income ratio, and other factors.
When you have a COE and you meet the lender’s qualifications, getting a loan pre–approval should be easy.
Disadvantages of the VA home loan program
The VA loan program exists to help veterans, active–duty military members, and their families buy safe and affordable housing.
But a VA loan isn’t always the answer. There are some scenarios where another, non–VA loan type makes more sense. For example:
- Not for investment properties – Your VA home loan must be used to buy a primary residence. It can’t be used for real estate investments such as rental homes or business properties
- Not for vacation homes – You can’t use VA borrowing for a second home or vacation home, either
- VA funding fee – There’s no PMI required on a VA loan, but there is a one–time “funding fee.” If you pay it upfront, the funding fee will add to your closing costs. Most borrowers choose to roll it into the loan amount, though this means you’ll pay interest on the extra sum
- Lower home equity – Making no down payment has a downside; you’ll start your homeownership journey with no equity. This complicates the selling process if you need to sell the home quickly for some reason
Despite these drawbacks, the VA loan is often the best choice for eligible borrowers.
With no down payment required and ultra–low mortgage rates, the VA loan is hard to beat – especially for first–time or credit–challenged home buyers.
VA mortgage lender FAQ
Do VA loan rates vary by lender?
You bet! Rates can vary considerably even among the best VA lenders. That’s why it’s so important to compare estimates from at least 3–5 companies before choosing one.
Do most VA loans get approved?
Probably; it’s easier to get approved for a VA loan than pretty much any other type of mortgage. However, lenders can impose their own standards. So if you’re on the borderline of qualifying, you may have to shop around for a VA lender that can help you.
Can I get a VA loan with a 500 credit score?
In theory, yes. The VA says, “Unlike many loan programs, a lower credit score, bankruptcy or foreclosure does not disqualify you from a VA home loan.” But you may have to really hunt to find a lender offering VA loans with a 500–579 score. Most mainstream lenders only go as low as 580, though one on our list says it considers applications from those with a 550 score.
What is a good VA loan rate?
VA loan rates are typically the lowest on the market; below FHA, USDA, or conventional loans in almost every case. So if you qualify for a VA loan, you have a head start on getting a low mortgage rate. That said, rates vary a lot even between the best VA lenders. In our sample, average 30–year fixed rates ranged from 2.76 percent to 3.06 percent in 2020. The better your credit, the lower rate you’re likely to get. Making a down payment can help lower your interest rate, too.
What lenders specialize in VA loans?
Most lenders are authorized to offer VA loans; you don’t necessarily need to work with a specialist. However, if you prefer a lender that focuses on VA loans, check out Veterans United home loans, Freedom Mortgage, USAA, and Navy Federal Credit Union for starters. These are all highly reputable and top–rated VA specialists.
Where can I find a VA construction loan lender?
Lenders willing to fund VA construction loans used to be rare. And some still refuse to offer those. But it’s easier to find one now than ever. If you can’t, consider financing the construction using a different sort of loan and then refinancing to a VA mortgage for a lower rate.
Where can I find a VA loan for a manufactured home?
Again, not all lenders will help with these. But they’re out there. You may want to call up a few lenders – or a mortgage broker – and ask about manufactured home loans. Odds are, this information will be harder to find online than info about standard VA loans.
What is a VA jumbo loan?
Since the VA program does not set loan limits, there’s not a jumbo loan option per se. However, buyers using their “remaining entitlement” – meaning they’re still paying off a previous VA loan – may be subject to local loan limits. In this case, a VA mortgage above conventional loan limits may be considered a jumbo loan and may require a down payment.
Does a Certificate of Eligibility ensure you’ll get a VA loan?
Not necessarily. You must get a COE to apply for a VA loan, but private lenders partner with the U.S. Department of Veterans Affairs to offer them. And the lenders can enforce their own qualifications.
How else can I avoid paying a down payment?
The VA loan program is one of only two mainstream mortgages that allow no down payment. The other is the USDA home loan, which is reserved for low– to moderate–income buyers in rural areas. Unfortunately, USDA loans require borrowers to pay mortgage insurance premiums each month. So they’re typically more expensive in the long run than VA loans. Other popular home loans require a down payment, though these can be quite low. Conventional mortgages start at just 3% down and FHA loans start at 3.5% down.
When is making no down payment a disadvantage?
It depends. Making a down payment means you have home equity from the day you close on the house. Without a down payment, you may have to make monthly payments for several years before building equity. As your home equity grows, your home can become a financial asset. As long as you don’t plan to sell the home within the first few years of homeownership, avoiding the down payment should be fine.
How much are VA loan closing costs?
In total, VA closing costs usually equal about 3–5 percent of the loan amount, including an origination fee of up to 1 percent of the loan amount and additional fees worth around 2–4 percent.
Who pays closing costs on a VA home loan?
The home buyer is expected to pay most closing costs on a VA home loan. One notable exception is the VA funding fee, which can be rolled into the loan amount rather than paid upfront. The buyer is also allowed to negotiate “seller concessions,” allowing the seller to pay up to 4 percent of the loan amount in closing costs. The amount a seller covers can even exceed 4 percent if they pay more in certain areas, like discount points.
Recap: The 9 best VA loan lenders
To recap, here are our top picks for the best VA loan lenders of 2021:
- Freedom Mortgage – Lowest average VA rates (tie), flexible credit minimums, low fees
- Guild Mortgage Co. – Best customer service (tie)
- Guaranteed Rate – Lowest average VA rates (tie)
- New American Funding – Excellent customer service, low average VA rates
- Cross-country Mortgage – Flexible credit minimums, excellent customer service
- Veterans United – Free credit counselling for poor–credit applicants
- American Pacific – Best customer service (tie), low average VA rates
- American Financial Network – Low average VA rates, excellent customer service
- Stearns Lending – Excellent customer service, low average VA rates
Remember, the ones at the top are the ones we think will appeal to most readers. But that’s not necessarily you. And you should pick the ones that offer what you want.
As importantly, don’t forget to get quotes from multiple lenders. Getting just two extra quotes really can save you hundreds or even thousands of dollars.