VA Loans: What Are They And How Do They Work?

1) How Does a VA Loan Work?

A VA loan is a mortgage-backed and insured by the U.S. Department of Veterans Affairs. It's designed to allow eligible service members, veterans, and surviving spouses to buy a home with fewer upfront costs and a few powerful advantages.

Who's Eligible?
90+ active duty days during wartime, or
181+ active duty days during peacetime
6 years in the Reserves or National Guard
Surviving spouses of veterans who died in service or from service-related causes

Steps to Secure a VA Loan:
1. Obtain your Certificate of Eligibility (COE)
2. Connect with a VA-savvy lender
3. Get pre-approved to understand your budget
4. House hunt strategically with your agent
5. Make your offer
6. Close and celebrate homeownership

2) What Are the Benefits of a VA Loan?

- No down payment required—$0, Nada, Zip, Zilch, Zero
- No PMI (Private Mortgage Insurance)
- Competitive interest rates
- Capped closing costs — protects you from unnecessary junk fees (and some actual fees)
- Flexible credit guidelines — because life happens
- Reusable benefit — you don't lose it after one use

All in all, a VA loan helps veterans keep more cash in their pockets while still building wealth through homeownership. It's a benefit that should be preserved, respected, and used wisely.

3) Should a Veteran Always Opt for a VA Loan?

This is where theory and reality start to part ways.

On paper, the VA loan offers phenomenal benefits—zero down payment, no PMI, and lower interest rates. It's designed to honor those who served by giving them an easier path to homeownership.

But in practice? That same VA loan is often pushed to the back of the offer pile, especially in competitive markets.

Why?

Because many listing agents either don't understand VA loans — or simply aren't willing to take the time to learn. And when they don't understand it, they avoid it.

Here's what veterans aren't always told:

A VA loan shifts certain costs onto the seller — or, in today's environment, onto their buyer's agent. The VA prohibits the buyer from paying specific fees (like commission), which can cause significant complications under the new rules post-NAR (National Association of Realtors) settlement.

Some agents may hesitate to work with VA buyers because there's no guarantee they'll be paid. And while that's not the veteran's fault, it does create invisible walls in the process.

In a multiple-offer scenario, when a seller sees an offer with no down payment, a mandatory appraisal, stricter inspection requirements, a seller-paid buyer agent commission, and a potentially slower timeline, they'll often favor the conventional loan with fewer strings attached.

And the veteran? Left wondering why they keep losing out — even with strong offers. This doesn't mean veterans shouldn't use a VA loan. But it does mean they need a savvy, unapologetic advocate in their corner — someone who knows how to present the offer powerfully, educate the listing agent when needed, and structure terms that remove doubt. Because when a VA loan is handled correctly, it can compete. It can win. But it requires strategy.

5) Anything Else to Add?

Veterans aren't always told how to use their VA benefits strategically — and unfortunately, many agents aren't trained to explain the trade-offs clearly. That's where the right guidance makes all the difference.

If you're a veteran, working with an agent who understands the complete picture of a VA loan — the perks, the pitfalls, and how to position it in a competitive market is essential. You deserve an advocate who can bridge the perception gap with sellers and present your offer.

Because this isn't just a loan — it's a benefit you've earned. And with the right strategy, it can be the key to winning the home you want — and building the future you deserve.

Casey Gaddy Realtor & The Gaddy Group