VA Home Loans in California (2026): How They Work, the Funding Fee, and What's Different Here

How a VA loan works

VA explains that its loan guaranty "protects your lender from losing money if you default on your loan," and that "In most cases, this guaranty allows you to buy a home with no down payment." For a VA-backed loan, a private lender makes the loan and sets the rate. VA notes that "Lenders offer competitive interest rates on VA-backed purchase loans," so compare more than one lender.

Even with full entitlement, VA says "your lender will still need to approve you for a loan." VA itself doesn't set a minimum credit score: "We don't require a minimum credit score, but some lenders do have a requirement, so be sure to contact more than one lender to compare."

Who's eligible, and the Certificate of Eligibility

VA's eligibility page lists service requirements by service period, and some surviving spouses may qualify. For someone serving now: "If you've served for at least 90 continuous days (all at once, without a break in service), you meet the minimum active-duty service requirement." Veterans' requirements depend on when they served, so check VA's table for yours.

VA describes the Certificate of Eligibility (COE) as the document that shows your entitlement. VA says: "You can request a COE online right now, or you can ask your lender to submit an online application for you." You can ask us to request it when you apply.

VA adds: "To get financing for a VA-backed home loan, you must meet credit, income, and occupancy requirements from both us and your lender." For a purchase loan, VA says, "You will live in the home you're buying with the loan."

How much you can borrow

How much you can borrow depends on your entitlement, the lender's approval and the appraisal:

• The appraisal sets a cap. VA says "The maximum VA loan on an individual property is either the appraised value of the property or the purchase price, whichever is lower."
• If you don't have full entitlement, VA says "your remaining bonus entitlement is based on the county loan limit where you plan to buy or refinance a home, minus the amount of your entitlement you've already used." VA's page shows how to find your county's limit.
• The math has a few steps. We'll walk through your own COE with you rather than guess.

The VA funding fee

VA explains that "The VA funding fee is a one-time payment that the Veteran, service member, or survivor pays on a VA-backed or VA direct home loan," and that it "helps to lower the cost of the loan for U.S. taxpayers since the VA home loan program doesn't require down payments or monthly mortgage insurance."

VA says it bases the fee on "The type of loan you get" and "The total amount of your loan," among other factors. VA's page has the current chart. You can include the fee in your loan or pay it at closing.

You won't pay the funding fee if any of these are true (VA's list):

• You're receiving VA compensation for a service-connected disability.
• You're eligible to receive that compensation but you're receiving retirement or active-duty pay instead.
• You're receiving Dependency and Indemnity Compensation (D.I.C.) as the surviving spouse of a Veteran.
• You're a service member who received a proposed or memorandum rating before the loan closing date that says you're eligible for compensation because of a pre-discharge claim.
• You're an active-duty member of the Armed Forces and, on or before closing, you provide evidence that you received a Purple Heart.

Closing costs and seller credits

No down payment doesn't mean no cash at closing. There are closing costs, and the funding fee unless you're exempt. VA says "You (the buyer) and the seller can negotiate who will pay closing costs." It also says: "We allow home sellers or builders to offer credits to cover some or all of the buyer's closing costs. We don't limit credits for a loan's closing costs, but we do limit seller's concessions to no more than 4% of your home's reasonable value." Ask us which seller credits count toward VA's limit.

Using your VA benefit again

VA says you can "Use your VA loan benefit again if you sell or refinance a home you bought with a VA-backed home loan." If you still own a home with a VA loan, you may have remaining entitlement for another purchase. That's the remaining-entitlement math above. Read how one family did it in Keys down the street from their first grandchild.

What's different in California

• Property taxes and Mello-Roos. San Bernardino County's Assessor explains that under Proposition 13 the property tax "cannot exceed 1% of the property's assessed value, plus any bonds or fees approved by the voters." Your county assessor can confirm yours. Some homes sit in a Community Facilities District with a Mello-Roos special tax. It depends on the address, not the city, so ask for the seller's Notice of Special Tax early. Our Mello-Roos guide shows how to read one.
• CalHFA's VA loan. CalHFA describes its VA program as "a VA-insured loan featuring a CalHFA fixed interest rate first mortgage." Ask us how it compares with a standard VA loan for you. See CalHFA first-time buyer loans.
• CalVet Home Loans. This is a separate program. CalVet says it is "a California state agency authorized to provide home loans to California veterans and their families," and that it "works exclusively with Veterans purchasing a primary home in California." It's worth comparing with a VA-guaranteed loan.

How to start

1. Request your COE, or ask us to request it for you.
2. Check whether you're exempt from the funding fee using VA's list above.
3. Get pre-approved and compare more than one lender, as VA suggests.
4. Ask about the property. Mello-Roos, HOA dues and the appraisal all matter for a VA purchase.
5. Ask for a Loan Estimate so you can see your closing costs and the funding fee before you commit.

The bottom line

A VA loan is a benefit you earned through your service, and it's worth understanding before you shop for a home. VA guarantees it, a lender makes it, and in most cases you can buy with no down payment and no monthly mortgage insurance. Bring your COE, or ask us to request it when you apply, and we'll walk through your entitlement, the funding fee and your California costs with you.

Questions buyers ask