Which entity is responsible for underwriting VA loans?

The Veterans Affairs (VA) department is responsible for underwriting VA loans. This means that while private lenders process and originate the loans, the VA provides the guarantee that helps lenders manage the risk associated with lending to veterans. The VA sets the standards for these loans, including eligibility requirements for the borrowers and conditions under which the loans can be issued.

The VA's underwriting process ensures that veterans receive favorable lending terms, as the VA guarantees a portion of the loan, making it more accessible and affordable for eligible borrowers. This backing from the government reduces the risk for lenders, encouraging them to offer loans with lower rates and fewer down payment requirements.

In contrast, other entities such as private lenders may participate in the loan process but do not perform the underwriting function for VA loans. Mortgage brokers act as intermediaries and do not underwrite loans themselves, while the Federal Housing Administration (FHA) is a distinct agency that primarily deals with its own types of loan products rather than VA loans.