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VA loan money has to be used to finance the veteran’s personal residence or home within the United States and its territories. However, the veteran can use the funds to purchase any of the following home-types:
- Townhouse
- Condo
- Newly constructed residence
- Manufactured home
- Single family home
The money can also be used to make improvements in the existing home or refinance an existing mortgage loan.
A point to remember is that the VA loan money is not given by the Veterans Administration. It is just guaranteed by the VA office and the borrower has to apply for the loan using a conventional bank or lender that offers VA loans.
Usually there is no maximum amount that the borrower can borrow. However, lenders set their own limits because many of the VA loans are sold on the secondary market. The lender will charge you 2 percent funding fee on the loan amount and this is payable when the loan is closed. Usually the funding fee is included in the loan amount and you will not have to pay anything from your pocket. The can be reduced if the veteran makes a down payment of at least 5 percent.
Many veterans apply for VA loan money because it offers 100 percent financing, no Private Mortgage Insurance, no penalties for prepaying the loan amount, easy loan qualifications and above all highly competitive interest rates.
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The first step in getting a VA loan is to get an appraisal. VA (Veterans Administration) regulates that all appraisals must be done by VA approved appraisers to protect Veterans. You can request a VA appraisal by filing out VA Form 26-1805, Request for Determination of Reasonable Value. 
