VA Direct vs. VA Backed Home Loan: What Sets Them Apart?

American flag and key on keychain

VA direct loans are issued and serviced by reputable VA home loans in Coral Springs. In some cases, the fees associated with VA home loans may be greater than those associated with conventional bank loans. But borrowers are not required to make a down payment. These fees can be included in the overall total, keeping the up-front cost manageable.

With a VA loan, you can buy a home, or multiple properties, refinance your current mortgage, or even improve your current home. Because of recent changes in the eligibility rules, VA direct loans are now only available to service members or veterans with precise disability conditions.

VA-backed loans are issued and administered by non-VA financial firms. The lender is more confident lending to applicants who might not qualify since the VA guarantees a portion of the loan, called VA entitlement.

Ace Mortgage Loan Corporation offers quality mortgage services in Coral Springs, allowing veterans to buy a primary house with no down payment. In addition, a VA funding fee is cheaper than a private or institutional lender. There are a few different types of VA loans.

NADL Program

Native American Direct Loans (NADL) are available to veterans who are Native Americans or married to Native Americans. This VA loan program offers high-quality mortgage services to help veterans finance the purchase, renovation, or expansion of property on federal trust land. NADLs are available for home refinancing to Native Americans who meet specific criteria:

  • Using the VA loan program on tribal lands requires a Memorandum of Understanding between your tribe and the VA
  • Have a current Certificate of Eligibility (COE)
  • Prove you can afford monthly bills and additional housing expenditures
  • Must be the resident of the home

VA-backed Purchase Loan

Banking institutions offer VA-backed purchase loans. You can qualify for this loan if you plan to reside on the property, have a valid COE, and satisfy the lender’s score and income criteria. There is often no down payment required for a VA-backed purchase loan, low closing costs, lower interest rates, and no prepayment penalty.

Cash-out Refinance Loan

Cash-out refinance loans let you borrow against home equity. If you have a certified COE and fulfill the creditor’s credit and income standards, a cash-out refi can help you pay off and reduce debt or amend your house loan to lower your interest rate and monthly income.

VA refinancing can be used to pay off any loan type, including existing VA and non-VA loans. Similar to a home equity line of credit (HELOC), this type of loan allows borrowers to access funds in the form of a personal loan while using the value of their property as security.


Interest rate reduction refinance loan (IRRRL) lets you refinance your existing VA-backed loan if you can verify your current or previous residency in the refinanced property. Refinancing with a VA IRRRL is limited to purchasing or improving a primary property. It cannot be used as a cash-out refinance for higher education.

When you work with us at Ace Mortgage Loan Corporation for VA home loans in Coral Springs, you’ll get personalized service to make your dream of house ownership a reality. It doesn’t matter if you’re just getting started, trying to get pre-approved, or refinance your current mortgage. Contact Ace Mortgage Loan Corporation team to get quality mortgage services.

Contact Us