A Field Manual on the most powerful mortgage benefit in the United States — earned through service, available for life, reusable across a career.
The VA loan benefit is the most generous mortgage program in the United States. Yet most veterans use it once and never use it again — often because their lender didn't know they could. Or they pay a funding fee they didn't have to pay. Or they refinance VA → conventional unnecessarily. Or they accept a quote that misses the bonus-entitlement math entirely.
This playbook is the VA loan reference for buyers and refinancers who want to understand what they're entitled to — and what to ask their lender to confirm.
If you're looking for the audience-specific version of this material — written in the voice of brothers and sisters in arms, with the personal context that decisions like this deserve — see The Military Mortgage Playbook in our profession series. This playbook is the technical reference. That one is the conversation.
Inside you'll find:
The VA Loan Guarantee program — authorized by the Servicemen's Readjustment Act of 1944 and refined by the Blue Water Navy Act of 2020 — is a federal program that guarantees a portion of mortgage loans made by private lenders to eligible veterans, service members, Guard, Reserve, and surviving spouses.
The VA does not lend money directly. The VA guarantees 25% of the loan amount — that backing is what allows private lenders to offer zero-down, no-PMI mortgages with below-market interest rates. The benefit is reusable. The benefit transfers under specific surviving-spouse circumstances. The benefit, in its modern form post-Blue Water Navy Act, has no county loan limit for borrowers with full entitlement.
The COE is the foundation document for any VA loan. Hero pulls it for free in roughly 10 minutes through the VA's WebLGY portal. Borrower-side documentation needed: DD-214 (every period of service) or current LES for active-duty. NGB-22 for separated Guard members. Statement of Service for active-duty buyers requesting expedited eligibility.
You have full entitlement if (a) you've never used the VA loan benefit before, OR (b) you previously used it but the loan has been paid off and your entitlement has been formally restored, OR (c) you sold a VA-loaned home where another veteran assumed your loan and substituted their entitlement for yours.
With full entitlement, the VA guarantees 25% of any loan amount with no county loan limit cap. You can purchase a $400,000 home with $0 down or a $1,400,000 home with $0 down — both work the same way (subject to qualifying on income).
You have partial entitlement if you've used the VA loan benefit and the prior loan is still outstanding (i.e., you currently hold one or more VA-financed homes).
The VA's guaranty cap for partial-entitlement files is tied to the county conforming loan limit. In 2026, the baseline conforming limit is $832,750. VA's guaranty cap = 25% of that = $208,187.50 in standard-cost counties. High-cost counties have higher caps.
For partial-entitlement buyers, the maximum no-down-payment purchase price is calculated as:
Example: Standard $832,750 county. Currently used entitlement on prior VA loan: $50,000. Remaining buying power = ($208,187 − $50,000) × 4 = $632,750 with $0 down.
Above that, you can still buy — you bring 25% of the amount over the calculated limit.
Most retail lenders run this math wrong (or don't run it at all) and tell partial-entitlement veterans they need a full down payment for the second VA loan. They don't. Hero's VA Bonus Entitlement calculator at heromortgagegroup.com/calculators runs the live math.
Three paths to restore entitlement on a previously-used VA benefit:
The VA funding fee funds the loan guarantee program. It's NOT a one-size-fits-all charge — it varies based on category of service, down payment, and whether this is your first or subsequent VA loan. It's also waived entirely for substantial categories of veterans.
0.50% of the loan amount, dramatically lower than purchase. Often the cheapest fee in any conforming refinance.
The waiver is automatic when documented. If you have any VA disability rating and your lender quoted you a funding fee, push back immediately. On a $400,000 loan, the funding fee waiver saves $8,600.
If your VA disability rating increased after your original VA loan funding fee was paid, you may be entitled to a refund. The refund amount is proportional to the date the higher rating took effect. Hero files the claim if applicable on every refinance.
The standard "buy a house" loan. $0 down with full entitlement (or sufficient partial). No PMI. Below-market rate. Reusable. Subject to property meeting VA Minimum Property Requirements (MPRs) and VA appraisal.
The cleanest refinance product in the mortgage industry. Required to refinance from a VA loan to a new VA loan. Key features:
The IRRRL is the right tool whenever rates drop 0.5% or more from your current VA rate.
Refinances any loan (VA or non-VA) into a new VA loan, with cash taken out up to 90% of appraised value. Full appraisal required. Useful for:
Funding fee on Cash-Out is higher (2.15-3.30% depending on subsequent use), so the cost-benefit calculation matters.
If you currently have a VA loan and you're PCSing or relocating, you can keep the existing home (as a rental) AND buy at your new location using remaining entitlement. The bonus-entitlement formula in Part II calculates your buying power. We close dual-VA files routinely.
Surviving spouses of service members killed in action or who died of service-connected causes after separation have their own VA loan entitlement — typically with the funding fee waiver. Dependents Indemnity Compensation (DIC) qualifies as fully-grossed-up income. These files are priority files in our pipeline.
VA almost always wins for eligible buyers. $0 down + no PMI + below-market rates beat virtually every alternative. The only cases where another program competes:
For a veteran with 20%+ down and a clear plan to NOT use the VA benefit again, conventional may produce slightly lower lifetime cost due to no funding fee. But for the vast majority of veterans, VA is cheaper.
VA wins essentially every time. FHA is the right choice only if you've used your VA entitlement, you're not VA-eligible, or your file has credit issues VA won't accept (very rare).
For full-entitlement veterans, VA is the right tool even at very high loan amounts (no county limit cap). For partial-entitlement veterans, the bonus-entitlement formula may require some down payment above the cap, but VA still typically beats jumbo conventional on rate.
VA wins. Same benefit (zero down) without USDA's geographic restriction and without USDA's annual fee.