b. Down payment

Because VA loans can be for the full reasonable value of the property, no down payment is required by VA except in the following circumstances:

·   If the purchase price exceeds the reasonable value of the property, a down payment in the amount of the difference must be made in cash from the borrower’s own resources.

·   Also, VA requires a down payment on all GPMs.

If a veteran has less than full entitlement available, a lender may require a down payment in order to make the veteran a loan that meets GNMA or other secondary market requirements.  The “rule of thumb” for GNMA is that the VA guaranty, or a combination of VA guaranty plus down payment and/or equity, must cover at least 25 percent of the loan.