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VA (Veteran Affairs) guaranty loans are made by private lenders, such as banks, savings and loans, or mortgage companies to eligible veterans for the purchase of a home which must be for their own personal occupancy. The guaranty means the lender is protected against loss if the borrower, or a later home owner, fail to repay the loan. The guaranty replaces the protection the lender normally receives by requiring a down payment, allowing eligible borrowers to obtain favorable financing terms.

The following are some of the benefits standard to all VA Home loans:

• Equal opportunity.
• No down payment (unless required by the lender or the purchase price is more than the reasonable value of the property).
• Buyer informed of reasonable value.
• Low interest rate.
• Ability to finance the VA funding fee (plus reduced funding fees with a down payment of at least 5% and exemption for veterans receiving VA compensation).
• Closing costs are comparable with other financing types (and may be lower).
• No mortgage insurance premiums.
• An assumable mortgage.
• Right to prepay without penalty.
• For homes inspected by VA during construction, a warranty from builder and assistance from VA to obtain cooperation of builder.
• VA assistance to veteran borrowers in default due to temporary financial difficulty.

Please note that the above information is taken directly from Veteran Affairs website. For more details on the VA loan program and eligibility rules, please visit the official VA website.