VA Loan Problems: What You Need to Know

Are you a veteran looking to buy a home? A VA loan might be the right choice for you. VA loans are designed to help veterans and active-duty service members purchase a home without the need for a down payment or private mortgage insurance. While VA loans offer many benefits, they are not without their share of problems. In this article, we’ll take a closer look at some of the most common VA loan problems and how to avoid them.

Understanding VA Loans: A Brief Overview

Before we dive into the problems associated with VA loans, let’s briefly discuss what they are and how they work. A VA loan is a type of mortgage that is guaranteed by the U.S. Department of Veterans Affairs. The VA does not actually lend money; instead, it guarantees a portion of the loan, making it easier for lenders to offer favorable terms to veterans and active-duty service members.

VA loans have many benefits, including:

  • No down payment required
  • No private mortgage insurance
  • Competitive interest rates
  • Flexible credit requirements

While all of these benefits make VA loans appealing to veterans, there are also some drawbacks worth considering.

Common VA Loan Problems

Problem #1: Delays in Loan Processing

One of the most common problems associated with VA loans is delays in loan processing. Because the VA has to approve each loan before it can be funded, the process can take longer than a traditional mortgage. This can be frustrating for veterans who need to close on a home quickly.

Problem #2: Low Appraisals

Another problem with VA loans is that they require the home to be appraised by a VA-approved appraiser. While this is designed to protect veterans from overpaying for a home, it can also lead to low appraisals that can kill a deal.

Problem #3: Funding Fee

VA loans require a funding fee, which is a one-time fee that is paid at the time of closing. This fee can range from 1.4% to 3.6% of the loan amount, depending on the type of loan and the veteran’s service record. While this fee can be rolled into the loan, it still adds to the overall cost of the mortgage.

Problem #4: Limited Availability

While VA loans are designed to help veterans and active-duty service members, they are not available to everyone. Only veterans who meet certain eligibility requirements, such as length of service and discharge status, are eligible for a VA loan.

Problem #5: Strict Property Requirements

In order to be eligible for a VA loan, the property being purchased must meet certain requirements. For example, the home must be in good condition and free of safety hazards. This can limit the types of homes that veterans can purchase with a VA loan.

Problem #6: Difficulty Qualifying

While VA loans are designed to be more accessible to veterans and active-duty service members, they can still be difficult to qualify for. Veterans must meet certain credit and income requirements, and the lender must be willing to work with the VA in order to process the loan.

Problem #7: Foreclosure Risk

Like any type of mortgage, VA loans carry a risk of foreclosure if the borrower is unable to make their payments. However, because VA loans are guaranteed by the government, the foreclosure process can be more complicated and lengthy than with a traditional mortgage.

How to Avoid VA Loan Problems

While VA loans come with their share of problems, there are steps that veterans can take to avoid them.

Tip #1: Work with a VA-Approved Lender

To ensure that your VA loan is processed as quickly and smoothly as possible, work with a lender who is experienced in VA loans and approved by the VA. They will be able to guide you through the process and help you avoid common pitfalls.

Tip #2: Get Pre-Approved

Before you start shopping for a home, get pre-approved for a VA loan. This will give you a better idea of how much you can afford to borrow and will make the buying process smoother.

Tip #3: Shop Around

Just like with any other type of mortgage, it pays to shop around for the best rates and terms on a VA loan. Don’t be afraid to ask lenders for quotes and compare them side-by-side.

Tip #4: Understand the Requirements

Before you start the VA loan process, make sure you understand the eligibility requirements and property requirements. This will help you avoid wasting time and money on a home that doesn’t meet VA standards.

Tip #5: Stay on Top of Payments

Finally, to avoid the risk of foreclosure, make sure you stay on top of your VA loan payments. If you’re having trouble making payments, reach out to your lender as soon as possible to discuss your options.

VA Loan Problems: Frequently Asked Questions

What is a VA funding fee?
The VA funding fee is a one-time fee paid by veterans at the time of closing. It helps to offset the cost of the VA loan program.
What are the eligibility requirements for a VA loan?
Eligibility requirements include length of service, discharge status, and other factors. Speak with a VA-approved lender to determine your eligibility.
Can I use a VA loan to buy a second home?
VA loans are intended for primary residences only.
Can I use a VA loan to refinance my mortgage?
Yes, veterans can use a VA loan to refinance their existing mortgage.
How long does it take for a VA loan to be processed?
The processing time can vary depending on the lender and other factors, but it typically takes between 30 and 45 days.
Can I get a VA loan with bad credit?
While there are no specific credit score requirements for a VA loan, veterans will need to meet the lender’s credit standards in order to qualify.
What happens if I default on my VA loan?
If you default on your VA loan, the lender can foreclose on the property. In some cases, the VA may help you negotiate a repayment plan or refinance the loan.
How much can I borrow with a VA loan?
The amount you can borrow with a VA loan depends on your eligibility and the lender’s underwriting standards. Speak with a VA-approved lender to determine your maximum loan amount.
Do I have to pay closing costs on a VA loan?
While VA loans do not require a down payment, veterans will still need to pay closing costs. However, these costs can be rolled into the loan in some cases.
Can I get a VA loan if I am self-employed?
Yes, self-employed veterans can qualify for a VA loan, but they may need to provide additional documentation to prove their income.
Can I get a VA loan with a non-veteran co-borrower?
Yes, veterans can apply for a VA loan with a non-veteran co-borrower, but the veteran will need to meet the eligibility requirements on their own.
Can I use a VA loan to buy a condo?
Yes, veterans can use a VA loan to buy a condo, but the condo must meet certain VA requirements. Speak with a VA-approved lender to learn more.
Can I use a VA loan to buy a fixer-upper?
Yes, veterans can use a VA loan to buy a fixer-upper, but the home must meet certain VA requirements and the loan amount may be limited.


In conclusion, VA loans offer many benefits to veterans and active-duty service members looking to purchase a home. However, they also come with their share of problems. By understanding these problems and taking steps to avoid them, you can make the most of your VA loan and achieve your dream of homeownership.

If you’re considering a VA loan, be sure to work with a VA-approved lender and stay on top of your payments. With a little effort and planning, you can overcome any VA loan problems that may arise and enjoy the many benefits of this valuable program.

Thank you for reading this article about VA loan problems. We hope it has been informative and helpful.


This article is intended for informational purposes only and should not be construed as legal or financial advice. Please consult with a qualified professional before making any decisions regarding your VA loan.