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What’s the Lowest Down Payment for a VA Loan in Washington State?

The Department of Veterans Affairs (VA) home loan program is an important benefit for military members and veterans in the U.S. It’s also arguably the best way to finance a home purchase, for those who qualify for the program.

Today we’ll address a common question among borrowers who are considering this program: What’s the minimum down payment for a VA loan in Washington State?

Minimum Down Payment for VA Loans in Washington: Zero

The VA loan program offers 100% financing to eligible borrowers who purchase a home that falls within the official loan limits. That’s what makes this program so unique. In fact, it’s one of the only mortgage options that allows home buyers in Washington to purchase a property without a down payment.

But there are some stipulations that go along with that benefit. In order to qualify for the maximum (100%) financing, borrowers generally must stay within the official VA loan limits for their county. Borrowing more than the limit usually means that a down payment of some kind will be required.

Example: The 2018 VA loan limit for King County, Washington is $667,000. Eligible home buyers who use this program could purchase a property up to that amount without making a down payment (in most cases). But if a home buyer in King County needed to borrow more than $667,000 with a VA loan, they would likely have to put some money down. Note: These limits are reviewed annually and sometimes go up to reflect rising home values.

From a borrower’s perspective, financing an entire home purchase and having no down payment is a pretty big deal. That’s why many of the borrowers who use this program attempt to stay within the official size limits. This allows them to complete the purchase without putting any money down at all.

Having the ability to buy a home with no down payment is one of the biggest benefits of VA loans in Washington. But it’s not the only benefit. This program also allows most borrowers to avoid paying mortgage insurance, which is typically required when little or no money is put down.

Other Programs Require More Money Down

Most military members and veterans in Washington qualify for the VA loan program, which offers financing up to 100%. Other mortgage programs tend to require a higher investment from the borrower.

For example, the minimum down payment for a conventional loan (one that is not backed by the government) can range from 3% to 5%. The minimum required investment for a Federal Housing Administration (FHA) loan is 3.5% of the purchase price or appraised value. So there’s a clear advantage here for those who use the VA program to finance a purchase.

Home Prices Continue to Rise Statewide

House prices across the state of Washington continue to climb. As of November 2018, the statewide median home value was around $375,000. That was about 8% higher than the same month a year earlier. And prices are expected to continue rising through the end of 2018 and into 2019.

As a result of higher housing costs, home buyers in Washington have become more concerned with down payments and monthly payments. The average down payment in the state has risen over the past few years, along with home prices. But those borrowers who use a VA loan can still finance up to 100% of the purchase price.

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