A VA loan is a mortgage loan available through a program established by the U.S. Department of Veterans Affairs. The VA sets the qualifying standards, terms of the mortgages offered, and guarantees a portion of the loan by the veteran paying a funding fee. However, the actual loan is provided by the lender, not the VA. A service member honorably discharged from any branch of the military is eligible: Army, Navy, Marines, Air Force, Coast Guard and National Guard. The service member can also be on active duty, in the reserves, or be a spouse of a deceased veteran. VA loans do not require a down payment unless stipulated by the lender, there are no prepayment penalties, and have limited closing costs compared with other mortgage programs.