If you’re a Veteran looking to purchase a home, you’ve probably come across the VA loan: zero down payment, no PMI, and often better rates than conventional mortgages.
But there’s a lingering question: how often do VA loans fall through? Despite rumors, these loans close successfully the majority of the time—comparable to conventional financing.
In this guide, we’ll explore the numbers, uncover the real reasons some VA loans fail, and offer practical steps to boost your odds of success.
By staying proactive and informed, you can navigate the VA loan process with confidence and secure that dream home.
Table of Contents
What the Stats Say about VA Loans Falling Through?
According to a blend of data from the Department of Veterans Affairs (VA) and realtor insights through 2025, around 5-10% of VA loans fail to close. That might sound high until you compare it to other loan types:
- VA Loans: Approximately 5-10% failure rate
- Conventional Loans: Around 4-8%
- FHA Loans: 10-15%
For a loan product that requires zero down payment and has relaxed credit requirements, the VA’s 90-95% success rate is solid. In fact, VA loans have helped millions of Veterans become homeowners with less out-of-pocket expense. If you’re feeling skittish about potential problems, remember that 9 times out of 10, your VA loan will close smoothly—especially if you prepare correctly.
Why VA Loans Sometimes Fall Through
Reason 1: Appraisal Issues
VA appraisals require properties to meet the VA’s Minimum Property Requirements (MPRs), focusing on safety and livability. While these MPRs protect you from buying a rundown property, they can cause 2-3% of VA deals to stall or fail. For example, a roof that needs a $2,000 repair or an outdated electrical panel can prompt the VA appraiser to demand fixes before closing. Sellers who dislike handling repairs might back out.
Example: A friend offered $320,000 on a home, but the appraiser flagged a $1,500 electrical fix. The seller refused, and the loan fell through—a real example of that 2-3% statistic in action.
Reason 2: Buyer Financing Problems
Even with lenient VA guidelines (like 0% down and no private mortgage insurance), underwriting can still uncover issues. Roughly 1-2% of VA loans flop because of:
- Dips in credit score below the lender’s threshold (often around 620)
- Unexpected job loss mid-process
- Increases in debt-to-income ratio
Real-World Scenario: A Veteran was pre-approved for $280,000, but lost his job two weeks before closing. Without stable employment, the lender had to withdraw the approval.
Reason 3: Seller Resistance
Sellers sometimes believe VA loans take longer (around 45 days) or fear they’ll be asked to cover additional costs—like a 4%
seller concession. This reluctance contributes to around 2-3% of deals falling apart. In sizzling markets, sellers may opt for a faster or more flexible conventional or cash offer to avoid potential hurdles.
Example: A $300,000 property had two offers: a $295,000 conventional and a $300,000 VA. The seller chose the conventional offer to dodge VA’s repair requests.
Reason 4: Low Appraisal Values
Low appraisals aren’t exclusive to VA loans, but VA buyers are often less flexible about bridging the gap with cash. If a VA appraiser says a home is worth $300,000 but you offered $310,000, the seller might have to lower the price or you’ll need to cough up $10,000 to fill the gap. About 1-2% of VA deals die for this reason. You can also
appeal your VA home appraisal.
Case Study: A friend tried to buy a $330,000 home. The VA appraisal came back at $320,000, and the buyer didn’t have the extra $10,000. The seller refused to drop the price, ending the deal.
Reason 5: Timing Delays
VA loans typically take about 45 days to close, partially because the VA appraisal can take 10-14 days. In high-demand markets—like Austin or San Diego—sellers may lean toward buyers who can close faster. Around 1% of VA deals fail due to timing.
Real-Life Snag: A $290,000 property listed on a hot market received multiple offers. The seller chose a conventional loan with a 25-day close instead of waiting out a 45-day VA timeline.
VA Loan Failure Rates by Reason
| Reason | Failure Rate | Example Cost/Time | Why It Happens |
|---|---|---|---|
| Appraisal Issues | 2-3% | $1,000-$2,000 repairs | MPRs force seller fixes |
| Buyer Financing | 1-2% | N/A | Credit or job loss |
| Seller Resistance | 2-3% | $6,000 closing costs | Perceived VA hurdles |
| Low Appraisal | 1-2% | $10,000 value gap | Buyer can’t or won’t pay difference |
| Timing Delays | 1% | 45 days vs. 30 days close | Sellers prefer faster alternative offers |
From the data above, you see how relatively small each risk factor is, totaling about 5-10% in combined scenarios.
How VA Loans Stack Up to Others
While 5-10% might sound worrisome, consider that FHA loans often have a higher fallout rate (10-15%), largely due to stricter credit requirements and more extensive property condition rules. Conventional loans enjoy a slightly lower 4-8% fallout rate because buyers can waive appraisals or offer large down payments to offset potential issues.
- VA Loans (0% down): 5-10% fail
- Conventional Loans (up to 20% down): 4-8% fail
- FHA Loans (3.5% down): 10-15% fail
Cash buyers rarely fail to close, but that’s because there’s no lender or appraisal. Yet, if you’re a Veteran, the VA loan can save you tens of thousands in upfront costs. Even factoring in a 5-10% risk, the upside is enormous.
Steps to Keep Your VA Loan From Falling Through
Want to cut the 5-10% risk closer to zero? Take these proactive steps.
Step 1: Get Pre-Approved Early
Before house-hunting, get pre-approved for a VA loan through a VA-savvy lender. By reviewing your credit, employment, and finances upfront, you’ll avoid the 1-2% possibility of financing fall-through. Pre-approval also signals to sellers you’re serious.
Step 2: Choose Move-In-Ready Homes
While it’s tempting to use your VA loan to buy a fixer-upper, properties that need major work can trigger MPR concerns. If you target homes already in decent shape, you reduce the 2-3% chance of appraisal issues. Small cosmetic fixes are usually okay, but bigger structural or safety problems can derail the loan.
Step 3: Offer to Cover Minor Repairs
If your VA appraisal flags a few minor repairs—like a leaky faucet or faulty smoke detector—offering to cover $1,000-$2,000 in repairs can keep the seller engaged. This goodwill gesture can save a deal that might otherwise die over minor repair costs.
Step 4: Move Fast on Appraisals
Because VA appraisals can take longer, scheduling it as soon as your offer is accepted will shave days off the closing timeline. A well-coordinated realtor and lender can bring the typical 45-day window down to 35-40 days, easing seller concerns.
Step 5: Plan for a Low Appraisal
If you think the appraisal might come in low, set aside some cash or be prepared to negotiate. A quick compromise—like splitting a $10,000 gap—keeps everyone on board. If that’s not feasible, look for a VA-friendly clause that allows you to exit without penalty if the appraisal is too low.
VA Loan Success Tips
| Risk | Proactive Fix | Cost/Time Impact |
|---|---|---|
| Financing Flop | Early pre-approval | $0, ~48 hours |
| Appraisal Issues | Target move-in-ready homes | $0, smaller home pool |
| Seller Pushback | Offer minor repair credits | $1,000-$2,000 |
| Low Appraisal | Save for potential gap | $5,000-$10,000 |
| Timing Delays | Order appraisal ASAP | Can cut 5-10 days |
Implementing these strategies boosts your closing odds above 95%.
Real Examples of VA Loan Outcomes
- Appraisal Fail: A $320,000 property needed a $1,500 electrical update. The seller refused to fix or negotiate, leading to a deal collapse.
- Financing Trouble: A Veteran pre-approved for $280,000 lost his job two weeks before closing, losing the home.
- Seller No: A seller accepted a $295,000 conventional offer instead of a $300,000 VA bid to dodge perceived hassles.
- Low Value: A $330,000 offer came in at a $320,000 appraisal. No extra $10,000 forced the deal to crumble.
- Success Story: A Veteran offered $310,000 on a move-in-ready home. Minor repairs cost $1,000. With quick appraisals, it closed in 40 days.
How to Strengthen Your VA Loan Application
Even if you’re months away from applying, you can tighten your financial profile now and reduce the risk of fall-through:
- Pay Down Debt: The lower your debt-to-income ratio, the more confident lenders are in your ability to pay.
- Build Your Credit Score: Aim for 620 or higher. A strong score can secure better terms and reduce lender hesitation.
- Stable Employment: Lenders love consistency. Avoid switching jobs mid-process if possible.
- Save an Emergency Fund: Even though VA loans require zero down, having a few thousand dollars saved can help with unexpected fees or small repairs.
By fortifying your finances, you gain leverage in negotiations and reduce the chance of surprises derailing your loan.
Navigating the VA Appraisal
To keep your VA loan on track:
- Know the MPRs: Familiarize yourself with the VA’s Minimum Property Requirements. Homes must be safe, structurally sound, and sanitary.
- Hire a Skilled Realtor: An agent experienced with VA loans can spot red flags—like outdated wiring or roofing issues—before you submit an offer.
- Use the Tidewater Process: If a VA appraiser thinks the home might not meet the contract price, they can initiate “Tidewater,” allowing you and your agent to provide additional comparable sales data. This step can help support the agreed price.
- Negotiate With Sellers: If repairs are needed, your realtor can craft a plan to get them done quickly or split costs.
Staying ahead of VA appraisal requirements minimizes the chance of last-minute surprises.
Working with Sellers to Seal the Deal
Sellers may have outdated notions about VA loans. Put them at ease by:
- Explaining the Benefits: VA loans usually close successfully and don’t necessarily take much longer.
- Offering Concessions: If you have some cash to spare, a small repair credit can sweeten the pot.
- Communicating Clearly: Show your pre-approval letter, mention your lender’s speed, and keep an open dialogue so the seller feels confident about your ability to close.
The goal is to overcome any stigma and position your VA offer as competitive, even in a multiple-offer situation.
Why VA Loans Are Still a Win
You might fret over a 5-10% chance of falling through, but consider what you gain with a VA loan:
- No Down Payment: You can potentially save $50,000 on a $250,000 home compared to a conventional loan requiring 20%.
- No PMI: Conventional loans often need private mortgage insurance if you put down less than 20%, adding hundreds to your monthly payment.
- Flexible Credit Requirements: The VA program is more forgiving with lower credit scores.
- Continued Benefits: Once you establish a VA loan, you have access to streamlined refinancing options in the future.
These perks often outweigh the relatively small risk of a deal collapse. With proper planning, you’ll likely be part of the 90-95% that closes successfully.
What to Do If Your VA Loan Application Is Denied
Getting denied for a VA loan can be frustrating, but it doesn’t mean you’re out of options. Many lenders, including big names like Veterans United, have strict guidelines. However, at VA Loan Network, we specialize in helping Veterans and military families get approved—even if you’ve been denied elsewhere. Here’s what to do next:
🔹 Understand the Reason for Denial – Common reasons include low credit scores, high debt-to-income (DTI) ratios, or insufficient income documentation. Request a detailed explanation from the lender.
🔹 Consider Manual Underwriting – Some lenders follow strict automated approval processes, but VA loans allow for
manual underwriting, which considers your full financial picture, not just credit scores. We work with lenders who offer this option.
🔹 Improve Your Financial Profile – Pay down debt, correct any credit report errors, and ensure all income sources are documented properly.
🔹 Work with VA Loan Experts – VA Loan Network can help create a custom game plan to address your denial reasons and match you with lenders that offer more flexible approval standards.
🔹 Explore Different Lenders – Not all VA lenders have the same requirements. VA Loan Network specializes in helping borrowers get approved through personalized solutions.
FAQs About How Often VA Loans Fall Through
- How often do VA loans fail to close?
About 5-10% of VA loans fail, roughly on par with conventional loans (4-8%) and significantly better than FHA’s 10-15% failure rate. - What’s the top reason VA loans fall through?
Appraisal issues, making up about 2-3%. The VA’s Minimum Property Requirements or low appraised values can lead sellers to walk away. - Do VA loans fall through more than conventional loans?
No. While VA loans have a 5-10% fail rate, conventional loans hover around 4-8%. They’re very comparable, with VA holding its own. - Can seller resistance kill a VA loan?
Yes, in about 2-3% of cases. Sellers worry about repair demands or closing delays, especially in competitive markets, prompting them to pick other offers. - How do appraisals affect VA loan closings?
Appraisals can flag property issues or low values. If a seller won’t address required fixes or meet a lower appraised price, deals can fall apart—roughly 2-3% of the time. - Can I prevent my VA loan from falling through?
Absolutely. Get pre-approved early, focus on move-in-ready homes, and be ready to negotiate or cover small repairs. These steps keep deals on track. - Are VA loans riskier for sellers?
They carry a slightly higher perceived risk due to stricter appraisals and zero down payment, but a 95% close rate proves they’re still strong. - How long do VA loans take to close?
They typically take around 45 days, partly due to the VA appraisal timeframe. However, a well-organized lender and realtor can often shorten this window.
The Bottom Line
VA loans are a powerhouse home financing option for Veterans, despite a modest 5-10% rate of fall-through.
By getting pre-approved, understanding the VA’s appraisal process, and maintaining clear communication with sellers, you can drastically reduce your chances of a deal collapse. Remember that VA loans offer major benefits—like zero down payment and no monthly PMI—that can save you thousands.
With proactive steps and a bit of flexibility, you’ll likely join the 90-95% of Veteran borrowers who reach the closing table successfully.
A VA loan isn’t just a path to homeownership; it’s a well-deserved advantage for those who’ve served.
