Yes. Eligible veterans, active-duty service members, and certain surviving spouses may be able to purchase a home in Maryland with no down payment using a VA-backed mortgage. However, no down payment does not necessarily mean no closing costs or other out-of-pocket expenses.
For military homebuyers in Annapolis, Anne Arundel County, Fort Meade, and throughout Maryland, understanding how this benefit works can make a meaningful difference when planning a home purchase.
How Does a Zero-Down-Payment VA Loan Work?
One of the most valuable features of the VA home loan program is the opportunity to finance up to 100% of a home's eligible purchase price.
Unlike many conventional mortgage programs, VA loans generally do not require a down payment when the borrower has sufficient entitlement, the purchase price is supported by the appraisal, and all lender requirements are satisfied.
VA loans also do not require monthly private mortgage insurance (PMI).
For qualified borrowers, these features can make homeownership possible without using a substantial portion of their savings for a down payment.
Does No Down Payment Mean No Closing Costs?
Not necessarily. This is an important distinction I encourage veterans to understand before beginning their home search.
Even with zero down payment, purchasing a home may involve expenses such as:
Property appraisal fees
Title and settlement charges
Prepaid property taxes
Homeowners insurance
Recording and other allowable closing fees
Initial escrow account deposits
The VA funding fee, when applicable
The good news is that some of these expenses may be covered through negotiated seller credits or other allowable financing arrangements.
In certain transactions, buyers may be able to reduce their cash needed at closing significantly.
The key is reviewing the entire transaction, not simply the down payment requirement.
For a more detailed breakdown, read our guide to VA Loan Closing Costs and Fees
What Is the VA Funding Fee?
The VA funding fee is a one-time charge that helps support the VA home loan program.
The amount depends on several factors, including whether the borrower has previously used the benefit and whether a down payment is being made.
Some borrowers are exempt from paying the funding fee, including certain veterans receiving VA disability compensation.
For borrowers who are not exempt, the funding fee can generally be financed into the VA purchase loan rather than paid entirely at closing.
Understanding this expense early helps avoid surprises when reviewing mortgage estimates.
Can a Seller Help Pay VA Loan Closing Costs?
Yes. VA guidelines permit sellers to contribute toward certain buyer closing costs.
Seller-paid closing costs and seller concessions are subject to applicable VA requirements, including specific limits on certain concessions.
This can be especially helpful when structuring an offer.
For example, a veteran purchasing a home in Anne Arundel County may wish to negotiate seller assistance toward eligible closing expenses rather than focusing exclusively on a reduction in the purchase price.
Which approach makes sense depends on the property, the market, the seller's willingness to negotiate, and the buyer's overall financial objectives.
Are There Situations Where a VA Loan Requires a Down Payment?
Yes. Although the VA program is widely associated with zero-down-payment financing, certain circumstances can change the amount required.
Examples include:
Reduced VA entitlement: A borrower who has an existing VA loan or has not fully restored previously used entitlement may need a down payment on a subsequent purchase.
An appraisal below the purchase price: If the agreed purchase price exceeds the VA-supported property value, the buyer may need to renegotiate, bring additional funds, or consider other permitted options.
Lender requirements: Individual lenders evaluate credit, income, debts, assets, and other factors when determining loan eligibility.
Importantly, veterans with full entitlement are not subject to a VA-imposed county loan limit, although lenders still determine how much a borrower can qualify to finance.
Buying With a VA Loan in Annapolis and Anne Arundel County
Maryland has a substantial military and veteran community, including families connected to the United States Naval Academy, Fort George G. Meade, and Naval Air Station Patuxent River.
Whether purchasing a first home in Annapolis, relocating for military service, or moving into a larger property elsewhere in Maryland, understanding VA financing options before making an offer is important.
Home prices, property taxes, insurance expenses, and closing costs can vary significantly by location.
A thoughtful mortgage review should consider not only the purchase price but also the estimated monthly payment and total cash needed to complete the transaction.
Why VA Loan Pre-Approval Matters
Before shopping for a home, I recommend that VA-eligible buyers have their financing reviewed.
A thorough pre-approval can help establish:
The estimated purchase price range
Available VA entitlement
Expected monthly housing expenses
Estimated cash needed at closing
Potential documentation or qualification issues
It also allows the lender and real estate agent to coordinate financing details before an offer is submitted.
The Bottom Line
A VA loan can provide an excellent opportunity for eligible Maryland veterans and military families to purchase a home without making a traditional down payment.
However, every transaction is different.
Understanding VA entitlement, funding fees, seller contributions, and closing costs is essential to developing a realistic homebuying plan.
At Redwood Mortgage Services, we've been helping homebuyers navigate mortgage financing since 1999. I welcome the opportunity to review your VA loan eligibility, explain your options, and help you understand what purchasing a home may look like for your circumstances.
Stuart Kiehne
President | NMLS #92008
Redwood Mortgage Services | NMLS #91893
Annapolis, Maryland
410-266-1621
www.Redwood-Mortgage.com
Schedule a conversation: https://calendly.com/stuart-70/introduction-and-conversation
All loans subject to approval. Equal Housing Lender.
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