The VA home loan is one of the best mortgage loan programs available today for Alabama active duty and honorably discharged Veterans. VA loans still offer no down payment and financing up to $2,000,000 for approved applicants. Below, we will discuss some of the great benefits of the VA mortgage and how to get started.
- Zero Down Payment, 100% financing.
- No monthly mortgage insurance (PMI)
- Simple credit qualifying compared to other types of mortgage loans
- Reduced credit scores down to 600 permitted
- Loan amounts beyond conforming loan limits with the VA Jumbo loan
- VA interest rates are some of the lowest rates available in the market today
- Assorted streamline rate-term reduction and 100% cash-out refinance options
Birmingham VA eligibility requirements:
Eligible borrowers for the VA loan program may include:
- Service persons on active duty
- Veterans
- Members of the National Guard
- Reservists
- Surviving spouses of deceased veterans
- Cadets at the U.S. Military, Air Force or Coast Guard Academy
- Midshipmen at the U.S. Naval Academy
- Officers of the National Oceanic & Atmospheric Administration
VA Mortgage Closing Costs?
Although the VA limits certain closing costs and lender fees, borrowers should expect to pay some standard closing costs. Please note, that whenever these fees relate to services performed by a third party, the borrower will only pay the actual amount charged by the third party. VA is very particular on what costs can be paid by the veteran.
Below are some of the standard VA closing costs:
(1) Appraisal and compliance inspections
(2) Recording fees
(3) Credit report
(4) Prepaid items (taxes, assessments, and similar items)
(5) Hazard insurance
(6) Flood determination
(7) Survey
(8) Title examination
(9) Title insurance
Borrowers also pay a VA funding fee. This fee (standard with all government-backed home loans) is a percentage of the loan amount. The amount of the funding fee depends on the borrower’s type of service, the purpose and type of loan, the size of the borrower’s down payment, etc. The funding fee generally starts at 2.15% of the loan amount for 100% financing.
VA Funding Fee For 2025:
| Down Payment | VA Funding Fee | |
|---|---|---|
| First use | Less than 5% | 2.15% |
| 5% or more | 1.5% | |
| 10% or more | 1.25% | |
| After first use | Less than 5% | 3.3% |
| 5% or more | 1.5% | |
| 10% or more | 1.25% |
The VA funding fee can be included in the loan amount and does not have to be paid at closing. Also, note if you are a disabled veteran, the funding fee normally is waived or discounted for veterans who receive VA disability compensation and unmarried surviving spouses of veterans who died in service or as a result of a service-connected disability.
So, how do you qualify for a VA loan in Birmingham? You must first verify your eligibility. If you are one of the above, you will need your Certificate of Eligibility (COE) The only borrowers that do not require a COE are those applying for VA IRRRL (Streamline). The COE provides evidence that the borrower meets the minimum terms of eligibility to apply for a VA loan. Don’t have a copy? No worries as we can assist you.
The next step is to get pre-approved with an experienced VA lender, one that is familiar with loans in Alabama. It is important that you contact a VA lender that understands the VA process well, as these loans are different compared to other loan programs.
The VA loan pre-approval involves a credit check and supporting documentation such as pay stubs and bank statements. Even with no down payment required for VA Mortgage loans, it’s important to know that there are VA closing costs involved in every transaction, which means there may be money due at closing. Don’t confuse zero down payment loans with meaning nothing is due at closing! Your VA lender should prepare you with a breakdown of costs and let you know how much is due at closing.
There are ways to finance the closing costs if you don’t have money available for closing. Your lender can help you with these options. In addition, the VA program permits the home seller to pay the vets closing costs.
Questions about getting qualified for a new purchase or refinance? Please reach out to us by calling the number above, or by submitting the Info Request Form on this page. VA Mortgage Hub is proud to serve all of Alabama including, Birmingham, Jefferson and Shelby County.