Current VA guidelines, updated from one source.
Four numbers and two tables decide most VA files, and all of them are here, drawn from one guideline source built on VA’s published rules: the down payment with full entitlement, the absence of mortgage insurance, the funding fee by first or subsequent use, the ratio guideline, and the residual-income table for the region.
100% financing with full entitlement
0% down is the program’s defining term: a buyer with full entitlement finances up to 100% of the lesser of price and value, the guaranty replaces the down payment, and the funding fee can be added on top of the loan rather than paid in cash.
No monthly premium, no upfront premium
There is no monthly mortgage insurance and no upfront premium on a VA loan at any leverage; the guaranty does the work that private mortgage insurance or FHA’s premiums do elsewhere, and the funding fee is the only program charge.
First use; 3.3% after first use; exempt for many disabled veterans
2.15% of the loan on first use and 3.3% after, both lower with five or ten percent down; the fee can be rolled into the loan or paid at closing, and VA waives it for disabled veterans receiving compensation, eligible surviving spouses, and Purple Heart recipients.
Residual income decides the file
Two tests, one guideline: the total-debt ratio is measured against 41%, and residual income is measured against the South table below for the household’s size. VA tells lenders the residual-income test carries more weight, which is why a modest ratio does not approve a thin budget.
| Loan type | Use | Down payment | Fee |
|---|---|---|---|
| Purchase or construction | First use | less than 5% down | 2.15% |
| Purchase or construction | First use | 5% to 9.99% down | 1.5% |
| Purchase or construction | First use | 10% or more down | 1.25% |
| Purchase or construction | After first use | less than 5% down | 3.3% |
| Purchase or construction | After first use | 5% to 9.99% down | 1.5% |
| Purchase or construction | After first use | 10% or more down | 1.25% |
| Cash-out refinance | First use | Any | 2.15% |
| Cash-out refinance | After first use | Any | 3.3% |
| Irrrl | Any | Any | 0.5% |
| Manufactured home (not permanently affixed) | Any | Any | 1% |
| Loan assumption | Any | Any | 0.5% |
| Vendee loan | Any | Any | 2.25% |
| Family size | Residual income |
|---|---|
| 1 | $441 |
| 2 | $738 |
| 3 | $889 |
| 4 | $1,003 |
| 5 | $1,039 |
| Each additional member, up to seven | + $80 |
Exempt from the funding fee: veterans receiving VA compensation for a service-connected disability, those eligible for it but receiving retirement or active-duty pay instead, surviving spouses receiving Dependency and Indemnity Compensation, service members with a pre-discharge claim rating, and active-duty service members who have received the Purple Heart. VA sets no minimum credit score; the wholesale programs behind these pages start at a 580 decision score and serve loan amounts up to $4,000,000, including loans above the conforming limit with full entitlement.
Refinances: cash-out to 100% loan-to-value after seasoning of 210 days and six payments with a net tangible benefit; rate-reduction refinances of an existing VA loan at a 0.5% fee without a VA appraisal. Current VA snapshot · updated October 1, 2026 · owner-occupied principal residences, one to four units · no VA loan limit with full entitlement · loans are assumable · no prepayment penalty · Lendmire is not affiliated with the Department of Veterans Affairs.
Program guidelines only, not an offer of credit. The leverage, funding fee tiers, ratio guideline, residual-income figures, and refinance terms on this page are VA parameters and lender overlays subject to change without notice and to full underwriting of the borrower, the entitlement, and the property. Lendmire is a broker, not a lender, and is not affiliated with the Department of Veterans Affairs. Licensed in sixteen states for consumer mortgages. NMLS #2371349.
What a VA loan is — and how the file is qualified.
A VA loan is an ordinary mortgage from a private lender wrapped in a federal promise: if the loan fails, VA covers part of the lender’s loss. That promise is what lets a Montgomery lender skip the down payment and the mortgage insurance, and the four cards below take the file apart piece by piece.
For the program overview, see Lendmire’s VA loan program, or the statewide guide at VA Loans in Alabama; to request a Certificate of Eligibility, see VA.gov.
The guaranty replaces the down payment
Because VA backs part of every loan, the lender’s risk on a Montgomery purchase is closer to a loan with a large down payment than to a high-leverage conventional loan. The program passes that difference to the borrower as no down payment, no mortgage insurance, and a cap on the fees a veteran can be charged.
Eligibility, entitlement, and the COE
The Certificate of Eligibility is the document that opens the file. It states the entitlement available, whether the funding fee is waived, and any prior use of the benefit. A Montgomery lender can usually pull it within the VA system from a DD-214 or a statement of service, and VA.gov issues it directly as well.
The funding fee, and who is exempt
Veterans receiving VA compensation for a service-connected disability pay no funding fee, and neither do surviving spouses receiving Dependency and Indemnity Compensation, Purple Heart recipients on active duty, or those rated before discharge. On a Montgomery file the exemption is confirmed on the COE and removes the program’s only cost.
Residual income over ratios
VA qualifies a household on what is left, not only on what is owed: residual income is the monthly income remaining after the proposed housing payment, other debts, taxes, and an allowance for maintenance and utilities, measured against a table by family size and region. A Montgomery family must meet the table for its size.
A lender runs exactly this math on a Montgomery file, with one refinement the page cannot make: underwriting also subtracts taxes, maintenance, and utilities before measuring residual income, so the rough residual here will read higher than the lender’s. The price, the fee tier, and the locked rate are the moving parts.
Where Montgomery’s veterans and service members buy — and how VA fits.
Start with the market, then the file. These Montgomery figures from the Census set the backdrop for a VA purchase: who owns, what homes are worth on the latest estimate, and what households earn, which together decide what a nothing-down loan and its payment look like locally.
Read the figures as backdrop. Two veterans with identical entitlement can see different files here: one buying at the median clears the residual-income table with room, another stretching above it needs the ratio justified. The market sets the spread.
Data sources: U.S. Census Bureau — ACS 5-Year (2024) housing and population estimates, including tenure, home values, gross rents, and household income.
Distinct Montgomery neighborhoods, distinct VA files.
The house decides the file as much as the borrower. These Montgomery submarkets differ in the property types VA accepts, the condition questions the appraisal raises, and the prices a typical buyer carries.
Higher-value homes
On Montgomery’s higher-value homes the VA loan’s reach shows: with full entitlement there is no down payment above the conforming limit, up to the maximum loan amount shown in the guidelines above. The credit floor is the lender overlay, and the file is qualified on residual income. Montgomery counts a population near 197K within the Montgomery, AL area.
Condominiums and townhomes
Close-in Montgomery condominiums suit the benefit well: nothing down, no insurance line, and a project review handled on the lender’s side. The dues go into the residual-income math, and the appraisal covers the project along with the unit. Roughly 44,189 Montgomery households own their homes on the latest Census estimate — 54% of all households, the pool a VA purchase joins.
Newer infill and recent construction
On recent construction in Montgomery the appraisal rarely raises findings and the arithmetic is the issue: does residual income clear VA’s table once the funding fee is financed into a larger loan, and does the certificate show full entitlement at that amount. Median household income in Montgomery sits near $56,811 on the latest Census estimate.
Two-to-four-unit homes
The small multi-unit Montgomery purchase is where VA’s leverage goes furthest: no down payment on two to four units, the buyer living in one, and the documented rent from the others helping the ratios and the residual income. On a home at Montgomery’s median value, a VA purchase with full entitlement needs no down payment at all — the funding fee on the full $161,900 is the program’s cost, and it can be financed.
Established close-in neighborhoods
The Montgomery blocks nearest the core carry the oldest houses, and VA’s appraiser reads them for condition as well as price: paint, roof, railings, systems. Findings become required repairs, and sellers usually complete them before closing. About 46% of Montgomery’s households rent — roughly 37,052 renter households on the latest Census estimate.
Neighborhoods near the installation
A service member buying near a Montgomery installation uses the benefit as designed: no down payment, an occupancy certification with allowances for deployment, and the option to keep the home as a rental on the next set of orders without refinancing. The median owner-occupied home value in Montgomery runs near $161,900 on the latest Census estimate.
Neighborhood sets the price and the property type; VA sets the rest. The guaranty, the funding fee, the ratio guideline, and the residual-income table apply identically on every Montgomery file, and full entitlement carries no loan limit anywhere in the county.
Four ways Montgomery veterans put the VA benefit to work.
A good use of VA is one the program’s shape fits: no down payment, no mortgage insurance, residual-income underwriting, and a guaranty that scales with the loan. Four common Montgomery uses follow.
Take cash out of a home with equity
The cash-out refinance replaces the Montgomery home’s first mortgage with a larger VA loan and hands over the difference, to the program’s leverage and after seasoning; it is also the route for refinancing a non-VA loan into the program, and a loan officer compares it with a second-lien option before recommending either.
Buy above the conforming limit
The VA jumbo is the program’s quiet strength in Montgomery: no down payment and no mortgage insurance on a loan above the conforming limit, qualified on residual income like any other VA file, with a credit floor set by the wholesale overlay rather than by VA.
Refinance an existing VA loan
An existing VA loan in Montgomery can be refinanced on its own record: the IRRRL skips the appraisal and most of the documentation, carries the smallest funding fee in the program, and must leave the borrower better off under VA’s net tangible benefit rules.
Buy a condominium in an approved project
VA keeps its own list of approved condominium projects, and a Montgomery unit in one of them is financed like a house with the association’s dues added to the ratios and the residual-income math. The appraisal covers the project as well as the unit.
Estimate the VA payment on a Montgomery price before requesting a quote.
The program’s own math on your Montgomery inputs: price less any down payment, plus the financed fee, amortized at the benchmark, with escrows added and nothing for mortgage insurance. The actual rate, payment, and costs come in writing from a licensed loan officer.
Montgomery VA payment estimate
Defaults describe Montgomery, not your purchase: put in the real price, the real fee tier, and the real escrows.
Editable benchmark: 7.03% as of September 24, 2026 · Freddie Mac 30-year average via FRED®. A conventional market reference, not a VA loan quote.
Illustrative starting assumptions: a $160,000 price near Montgomery’s median owner-occupied home value, no down payment with full entitlement, a first-use funding fee financed into the loan, a thirty-year term at the current Freddie Mac benchmark, property taxes and insurance estimated for Alabama (U.S. Census Bureau). Every field is editable.
Illustrative estimate only — not a Loan Estimate, approval, quote, or commitment to lend. The rate field carries the weekly Freddie Mac thirty-year conventional benchmark, a market reference and not a VA loan quote; your rate is set by the lender at lock. The funding fee follows VA’s published table for the use and down payment entered; the residual-income figure is VA’s guideline for the region and family size, and the rough residual shown subtracts only the housing payment and the debts entered, while VA also deducts taxes, maintenance and utilities. Taxes, insurance and dues are editable estimates; closing costs are not included. Licensed in sixteen states for consumer mortgages. Lendmire is not affiliated with or acting on behalf of the Department of Veterans Affairs.
Same veteran, three very different closings.
Choosing among VA, FHA, and conventional in Montgomery is really choosing an insurance structure and a down payment at the same time. Each is laid out below with the buyer it fits.
VA, FHA, or conventional.
No down payment with full entitlement, no mortgage insurance at any leverage, a one-time funding fee that can be financed or waived, residual-income underwriting, no loan limit with full entitlement, and a loan that can be assumed. The cost is the funding fee, and the condition is eligibility.
FHA’s leverage is high and its credit standard is forgiving, but its insurance never comes off a full-leverage thirty-year loan. A Montgomery veteran comparing the two sees the premium line in the FHA payment and nothing in that line on VA. See Lendmire’s FHA loan program.
Conventional financing asks for a down payment and a higher score, in exchange for insurance that cancels and no funding fee. A Montgomery veteran with a large down payment and a subsequent-use fee tier should see both programs run on the same numbers. See Lendmire’s conventional loan program.
Where each one fits: VA for the eligible buyer who wants no down payment and no mortgage insurance; FHA for the buyer without eligibility who needs the small investment and the forgiving score; conventional for the buyer with twenty percent down or a strong score who wants cancellable insurance.
What to prepare for a Montgomery scenario review.
Gather these before a Montgomery review: ordinary mortgage documents plus the proof of service that opens the file.
This is a general preparation guide, not a universal checklist. The selected lender may request additional information based on the transaction, the property, entitlement, and the income picture. Nothing here is legal or tax advice.
Local details that can change the loan.
When a Montgomery VA file surprises someone, the cause is usually one of these: entitlement partly in use, a higher fee tier than expected, required repairs from the appraisal, a condominium without VA approval, or residual income below the table.
Use these checks to keep the Montgomery file clean and fundable.
The list is short because the program is: entitlement, the fee, and the property decide most Montgomery files before income is even opened.
- Confirm the entitlement: the COE states the entitlement available; full entitlement carries no loan limit.
- Know the fee: the tier follows first or subsequent use and the down payment, as the funding fee table above shows.
- Match the occupancy: second homes and rentals are outside the program.
Full or remaining entitlement
The COE states the entitlement available, and that single line decides whether a Montgomery purchase closes with nothing down at any price the appraisal supports or needs a down payment on the part VA does not back. A veteran keeping an earlier VA-financed home as a rental is the usual remaining-entitlement case, and the file still works.
The funding fee tier and the exemptions
The fee depends on whether the benefit has been used before and on the down payment, and it is waived for veterans receiving compensation for a service-connected disability, surviving spouses receiving DIC, active-duty Purple Heart recipients, and service members rated before discharge. On a Montgomery file the tier is confirmed from the COE.
Occupancy and the reasonable-time rule
Second homes and rentals are not VA purchases. A Montgomery buyer who will never live in the home cannot use the benefit for it, but a service member whose spouse will occupy it during a deployment can, and a veteran may later move out and keep the home as a rental without refinancing.
Residual income and the ratio guideline
Residual income is measured after the housing payment, other debts, taxes, and VA’s allowance for maintenance and utilities, against a table by region and family size. A Montgomery household must meet the figure for its size, and a ratio above VA’s guideline needs residual income well above the table or a documented justification.
Seller concessions and the fees a veteran may not pay
Two rules shape the Montgomery contract: the seller may pay closing costs and, within VA’s cap, concessions such as prepaids and the funding fee; and the veteran may not be charged certain fees that other buyers pay. Structured with both in mind, a VA purchase can close with no down payment and modest cash.
From a Montgomery Certificate of Eligibility to keys in hand.
Underneath, the Montgomery process is any mortgage process; on top sit VA’s checks: the certificate, the property requirements, the project approval where it applies, and the residual-income test. Each step below says what happens and what the buyer does.
COE and pre-approval
A Montgomery pre-approval is a sizing exercise: the certificate, the income, the family size, the funding fee tier, and the price. The loan officer confirms eligibility and entitlement against the program rules and puts the pre-approval in writing for the offer.
Contract and appraisal
With the contract signed, the lender requests a VA-assigned appraiser, who values the Montgomery home and checks it against VA’s property requirements; the Notice of Value is issued on the report. Seller concessions are checked against VA’s cap, and any condominium project approval is confirmed.
Underwriting
The file is scored by the automated system or underwritten manually, with income, assets, credit, and residual income documented. Seasoning after a credit event is confirmed from the discharge or transfer papers, the funding fee tier is confirmed from the COE, and the ratio is measured against VA’s guideline.
Closing
Closing is where the fee becomes real: financed into the total loan or paid at the table, with the seller’s concessions applied and the fees a veteran may not pay removed from the sheet. The Montgomery buyer takes the keys and VA backs the lender.
A brokerage that puts the benefit to work.
The case for a brokerage on a VA loan is candor with numbers: VA beside conventional on the same inputs, the fee tier stated outright, the entitlement checked first, and the terms in writing.
Three programs, one set of numbers
Before any recommendation, VA, FHA, and conventional are run on the same Montgomery price, income, and down payment. The buyer sees the payment, the insurance or fee line, and the cash to close for each, and the choice follows the figures.
The fee and the entitlement explained before the offer
The fee is the program’s cost and the entitlement is its reach, and Lendmire explains both first rather than last: how much the fee is, whether it is waived or refundable, and what the certificate supports for a Montgomery buyer at the price in hand.
Licensed, consumer-purpose, in writing
What this page shows are VA’s parameters and the wholesale overlays; what a specific Montgomery loan gets is a written set of terms from a licensed loan officer after the review. Lendmire is a broker, never the lender, and has no affiliation with the Department of Veterans Affairs.
Trusted by veterans & families alike.
Montgomery VA loan FAQs
Plain answers to the questions Montgomery veterans ask most about VA loans, in the order they usually ask them.
What is a VA loan, and who is it for?
A VA loan is a mortgage from a private lender with a partial guaranty from the Department of Veterans Affairs: VA backs a share of the loan, and in exchange the program allows no down payment with full entitlement, no monthly mortgage insurance, a residual-income test, and a cap on the fees a veteran can be charged. It is for veterans, service members, National Guard and Reserve members, and eligible surviving spouses buying a principal residence in Montgomery.
Who is eligible for a VA loan in Montgomery?
Most veterans with an honorable or general discharge, current service members past the minimum period, Guard and Reserve members with enough qualifying service, and eligible surviving spouses. Other-than-honorable discharges can disqualify, and VA reviews them case by case.
How do I get a Certificate of Eligibility?
The lender is usually the fastest path, and VA.gov the next. The certificate shows available entitlement, prior use of the benefit, and any funding fee exemption, which is why a Montgomery loan officer wants it before sizing the loan.
What is the VA funding fee, and do I have to pay it?
A one-time charge VA collects to fund the guaranty, set as a share of the loan by first or subsequent use and by the down payment, as the snapshot ladder shows. It can be financed into the loan, paid at closing, or paid by the seller. Veterans receiving compensation for a service-connected disability, surviving spouses receiving DIC, Purple Heart recipients on active duty, and service members rated before discharge are exempt.
Is there a VA loan limit in Montgomery?
VA removed the loan limit for veterans with full entitlement; the wholesale programs behind these pages serve loan amounts up to the ceiling in the snapshot. Only a Montgomery buyer with entitlement still in use on another loan needs the county figure, and it is confirmed by a loan officer rather than quoted here.
Is a VA loan assumable?
Yes, with the lender qualifying the assumptor. It is one of the program’s quieter advantages for a Montgomery owner who may sell into a higher-rate market, provided the release of liability and the entitlement are handled at the assumption.
How does a VA refinance work?
The IRRRL is the simplest: a reduced fee, no appraisal in most cases, a net tangible benefit, and the existing loan’s payment history as the test. The cash-out refinance takes an appraisal, full underwriting, seasoning, and the cash-out fee tier.
Can I get a VA loan after a bankruptcy or foreclosure?
After the waiting period, yes. Each event has its own period counted from a specific date, and the lender confirms it from the discharge or transfer papers; gather those dates before the review.
Can I use a VA loan to buy a condominium?
Yes, with one extra step: the project review against VA’s list. Approved projects close on the ordinary file; a Montgomery project not yet approved can be submitted, which takes time and the association’s cooperation.
Can I take cash out with a VA refinance?
Cash-out is a full refinance at the snapshot’s leverage, available on a principal residence after the seasoning period, with full underwriting and the residual-income test. A Montgomery owner with a low-balance first mortgage often compares a second lien first.
VA, FHA, or conventional for Montgomery: compared on your numbers.
Put your Montgomery figures into the calculator, then ask for a review. Entitlement, the funding fee tier, residual income, and the loan VA supports are confirmed against the program’s rules, and a licensed loan officer provides the terms in writing.
This guide covers Montgomery — for the statewide guidelines, markets, and scenarios, see VA Loans in Alabama, part of Lendmire’s VA loan program.
Nearby markets in Alabama: Hoover · Birmingham · Tuscaloosa · Mobile · Huntsville
Related programs: Conventional Loans · FHA Loans · Jumbo Loans