The VA home loan is one of the most valuable benefits of service: for most buyers no down payment, no monthly mortgage insurance, and firm limits on what a lender can charge you. Illinois and Cook County add property tax exemptions that can take a large bite out of a disabled veteran’s tax bill. How it all works in Chicago in 2026, from the Certificate of Eligibility to the closing table, and the questions to bring to your lender.
By The Boulevard Group at Fulton Grace Realty, licensed Chicago real estate brokers, not lenders or tax advisors. Gathered from the sources named in each section and reviewed Monday, October 12, 2026.
We are real estate agents. We are not lenders, loan officers, VA representatives, accredited claims agents, tax advisors or attorneys, and nothing in this guide is advice for your situation. We gathered it from the Department of Veterans Affairs, federal law, the State of Illinois, Cook County and the City of Chicago as of October 2026. Fees, limits and programs change, and lenders apply the rules differently, so confirm anything you plan to act on with a VA-approved lender, a VA-accredited Veteran Service Officer, the Cook County Assessor, or the source itself.
Can a veteran buy a home in Chicago with no money down? Usually, yes. With a VA-guaranteed loan and full entitlement there is no VA loan limit and no down payment, as long as the price is not above the appraised value, and there is no monthly mortgage insurance. You still pay a one-time funding fee (2.15 percent on a first use with less than 5 percent down) unless you are exempt, as veterans receiving VA disability compensation are, plus closing costs, which the seller can help with. The lender still has to approve your income and credit.
The VA sets minimum service by era and status. Service members on active duty need at least 90 continuous days. Veterans who served on or after August 2, 1990 need 24 continuous months, or the full period they were called to active duty (at least 90 days), and less than the minimum counts if you were discharged for a service-connected disability. Earlier eras have their own minimums; a 2021 law reached Vietnam-era eligibility back to service that began November 1, 1955.
National Guard members qualify with 90 days of non-training active duty under Title 10; with 90 days of active duty that includes 30 consecutive days, with a DD214 showing activation under 32 U.S.C. 316, 502, 503, 504 or 505; or with six creditable years in the Guard. Reserve members qualify with 90 days of non-training active duty or six creditable years in the Selected Reserve. A surviving spouse can qualify if eligible for or receiving Dependency and Indemnity Compensation (DIC), or as the spouse of a service member missing in action or a prisoner of war.
Short of the minimum? A discharge for hardship, the convenience of the government, an early out, a reduction in force or certain medical conditions can still qualify. With an other than honorable, bad conduct or dishonorable discharge you may not be eligible, but you can apply for a discharge upgrade or ask the VA for a Character of Discharge review.
The Certificate of Eligibility (COE) shows a lender you qualify. There are three ways to get it: online at VA.gov, through your lender, which can request it in the VA’s own system, or by mailing VA Form 26-1880. A veteran needs a DD214; someone on active duty needs a signed statement of service from their command; a surviving spouse needs the veteran’s DD214 and the DIC or survivor forms the VA lists. The VA publishes no turnaround time, only that mail requests may take longer.
Sources for this section: VA, eligibility for VA home loans and how to request a COE; Public Law 116-315 (the 2021 Guard and Vietnam-era changes); 38 U.S.C. 3701.
Entitlement is the part of your loan the VA guarantees to the lender, and it is why a lender will lend with nothing down. With full entitlement (you have never used it, or it has been restored), there has been no VA loan limit since 2020: the VA guarantees 25 percent of whatever you borrow. That does not mean unlimited borrowing. The lender still approves your income, credit and savings, and the loan cannot be more than the price or the appraised value, whichever is lower (plus the funding fee, if you finance it).
With part of your entitlement in use, for example a VA loan still open on a home you kept, the county loan limit comes back into the math. In Cook County the 2026 limit for a one-unit home is $832,750. Your remaining entitlement is 25 percent of that limit minus what is in use, and lenders generally lend four times the remaining entitlement with no down payment. If $40,000 is tied up in an open loan, 25 percent of $832,750 is $208,187, less $40,000 leaves $168,187, and four times that is about $672,750 with nothing down. Above that you would usually need a down payment, and your lender will show you how much. For a two- to four-unit building the VA still uses the one-unit limit in this math.
Using it again. Entitlement comes back when the old loan is paid off and the home is sold, or when another eligible veteran assumes your loan and substitutes their entitlement for yours. Once in a lifetime, you can also restore it when the loan is paid off and you keep the home. Using it a second time only changes the funding fee.
Sources for this section: VA, VA home loan limits; VA Circular 26-19-30 (no limit with full entitlement, from 2020) and 26-25-10 (the one-unit limit for 2 to 4 units, 2026); the FHFA, 2026 conforming loan limits (Cook County); 38 U.S.C. 3702 (restoring entitlement).
There is no monthly mortgage insurance on a VA loan. In its place is a one-time funding fee, set by law, that you can pay at closing or add to the loan. For a purchase in 2026:
| Your down payment | First use | After the first use |
|---|---|---|
| Less than 5% | 2.15% | 3.3% |
| 5% to under 10% | 1.5% | 1.5% |
| 10% or more | 1.25% | 1.25% |
These rates have applied since April 7, 2023, and the law keeps them through June 8, 2034. You pay no funding fee if you receive VA compensation for a service-connected disability; if you are eligible for that compensation but receive retirement or active-duty pay instead; if you are a surviving spouse receiving DIC; if you are a service member with a proposed or memorandum disability rating before closing; or if you are on active duty and show evidence of a Purple Heart on or before closing.
What a lender can charge you is limited. A lender may charge a flat fee of up to 1 percent of the loan, which replaces its origination-type charges, plus itemized costs the VA allows: the appraisal, credit report, recording fees and taxes, title examination and insurance, a survey, hazard and flood items, and prepaid taxes and insurance. You cannot be charged separately for things like document preparation, loan closing or settlement fees, rate locks, processing or application fees, tax service fees or a loan broker. In Illinois, the VA’s list of state exceptions allows an attorney fee, which matters here because in Chicago both the buyer and the seller customarily hire a real estate attorney.
Chicago’s transfer tax falls partly on the buyer: the city’s portion, $3.75 per $500 of price, which is $3,750 on a $500,000 home. The seller generally pays the CTA portion and the state and county taxes. The VA allows recording taxes at the amount the law requires; our reading is that you may pay the city’s portion, and your lender should confirm.
The seller can help. Seller concessions on a VA loan can reach 4 percent of the home’s reasonable value. That cap counts things like the seller paying your funding fee, your prepaid taxes and insurance, or paying off a debt of yours. It does not count the seller paying normal closing costs or customary discount points, so a seller can cover those on top.
Paying your buyer’s agent. VA rules long barred veterans from paying real estate commissions. Since August 10, 2024, a VA circular lets you pay a reasonable and customary buyer’s agent charge, as long as it is not financed into the loan and shows on your Closing Disclosure; a seller paying your agent does not count as a concession. As of October 2026 that circular remains in effect, and a 2025 law asked the VA for a lasting plan so veterans are not at a disadvantage in hiring an agent. How your agent is paid is set in a written buyer representation agreement, and we go through it with you before you tour.
Sources for this section: VA, funding fee and closing costs; 38 U.S.C. 3729 (the fee and exemptions); Public Law 118-210 (the 2034 date); 38 CFR 36.4313 (what a veteran may be charged); the VA’s state fees and charges deviations list (Illinois); VA Circular 26-24-14 (buyer’s agent charges); Public Law 119-31; the City of Chicago, real property transfer tax.
A VA appraiser does two jobs: sets the home’s value and checks it against the VA’s Minimum Property Requirements. The result is the lender’s Notice of Value. The home has to be safe, structurally sound and sanitary: a roof that keeps water out, heat adequate for healthy living, hot water, safe drinking water and working plumbing and sewer. On homes built before 1978 the appraiser has treated cracking, peeling or chipping paint as lead-based paint that must be corrected. In February 2026 the VA dropped several requirements, radon among them, and condensed its lead-paint rules for appraisals ordered after May 1, 2026, so ask your lender how the current rules apply to an older building. In Chicago, where most of the housing is old, that is the conversation to have early: peeling paint, a tired porch (see our porch guide) or a boiler on its last legs can all become conditions of the loan.
If the value looks short, the VA’s Tidewater process gives your side a chance before the report is final: the appraiser tells the lender, and the lender has two working days to send recent sales that support the price. After the report, you can ask for a reconsideration of value through the lender, with sales data or errors in the appraisal.
You are protected if it still comes in low. Every VA purchase contract must say that if the price is above the VA’s reasonable value, you will not lose your earnest money and do not have to buy, though you can choose to go ahead and pay the difference in cash.
Timing and cost in Cook County. The VA sets the appraisal fee at $650 for a single-family home or condo and $850 for two to four units, with a standard of 7 business days to complete. Lenders in Illinois also generally require a wood-destroying insect (termite) inspection. Since June 15, 2022 you are allowed to pay for that inspection and for repairs the appraisal requires, so who pays is something to negotiate in the contract.
Sources for this section: the VA Lender’s Handbook, chapters 12 and 13 (Minimum Property Requirements, Notice of Value; as reproduced from the VA’s KnowVA portal); VA Circular 26-17-18 (Tidewater) and 26-22-11 (who may pay for repairs and the termite report); 38 CFR 36.4303(k) (the escape clause); the VA’s appraisal fees and timeliness table (effective May 1, 2026).
Condos. A condo qualifies only if the building is on the VA’s approved list, which you can search on the VA’s condo report. Check before you fall for a unit. If the building is not approved, the lender can ask the VA to approve it, with the association’s declaration, bylaws, budget, minutes and a statement on lawsuits and special assessments. The VA publishes no timeline for that review, so start it early or plan for another building. Illinois law also requires the seller to give you the association’s key documents (the declaration and rules, the budget and reserves, expected capital spending, lawsuits and insurance), which the board must produce within 10 business days. Our condo rules page walks through reading them.
Two- to four-unit buildings. A VA loan can buy a building of up to four units if you live in one of them, which makes it one of the strongest ways to buy a Chicago two-flat. The rent from the other units counts toward your income only if you can show a reasonable likelihood of success as a rental property owner, through prior experience managing rentals or a management company, and you have at least six months of the full payment in reserve. The lender usually counts 75 percent of the lease. Our two-flat guide and two-flat calculator help you run the numbers.
Living there. You certify that you intend to move in within a reasonable time, which the VA treats as within 60 days of closing; a later date can work with a specific reason, but generally not more than 12 months. If you are on active duty, your spouse, or a dependent child through a guardian, can meet the requirement, and a deployed service member is treated as on temporary duty and still qualifies.
New construction. Since March 31, 2025 a builder no longer needs a VA builder ID; the builder must still be properly licensed in Illinois and Chicago.
Sources for this section: VA, VA-backed purchase loans and the condo report; the VA Lender’s Handbook, chapters 3 and 16 (occupancy; condominiums); 38 CFR 36.4340 (rental income); 38 U.S.C. 3704(c) (occupancy); VA Circular 26-25-1 (builder IDs); the Illinois Condominium Property Act, section 22.1, as amended by Public Act 102-0976.
Illinois takes value off a veteran’s home before the tax is figured. The exemptions work on equalized assessed value (EAV), the taxable value on your bill: in Cook County a home is assessed at 10 percent of its market value, and the state’s equalizer is applied to that.
| Exemption | What it takes off | Who qualifies |
|---|---|---|
| Veterans with Disabilities | 30 to 49 percent rating: $2,500 of EAV. 50 to 69 percent: $5,000. 70 percent or more: the first $250,000 of EAV, which for many homes is all of it. | A veteran with a VA-certified service-connected disability who owns and lives in the home. World War II veterans qualify regardless of disability. A surviving spouse who has not remarried may keep it or move it to a new home, and a surviving spouse receiving DIC gets the $250,000 level. |
| Returning Veterans | $5,000 of EAV, for the tax year you return from an armed conflict and the year after. | A veteran who owns and lives in the home on January 1 and files each year. |
| Specially Adapted Housing | Up to $100,000 of assessed value. | A home bought or adapted with federal specially adapted housing funds. It cannot be combined with the Veterans with Disabilities exemption. |
| Homeowner | $10,000 of EAV, renewed automatically. | Anyone who owns and lives in the home. |
| Persons with Disabilities | $2,000 of EAV. Cook accepts a VA 100 percent award letter as proof. | It cannot be combined with the Veterans with Disabilities exemption, so you would take the larger one. |
Buying mid-year. Illinois law prorates the Veterans with Disabilities exemption by month, starting with the first complete month you live in the home, and the Cook County Treasurer says you can apply at any time of year. The Assessor’s own page asks for occupancy by January 1, so call the Assessor (312-443-7550) and ask for the prorated amount for the year you buy. Since the 2025 filing period has closed, a buyer who closes in 2026 will most likely file for tax year 2026 when Cook opens applications in 2027; late filings for past years can go through a Certificate of Error.
How to apply. File online at the Assessor’s filing site or by mail to 118 N. Clark St., Room 320. The first time, you need your DD214 certified by the Cook County Clerk or the Illinois Department of Veterans’ Affairs (IDVA), plus a VA letter showing your name, rating and its effective date, your ID and an occupancy affidavit. If you own a two- to six-unit building, add an affidavit of units. A veteran rated 100 percent and permanently and totally disabled renews automatically; everyone else files every year. If your rating may be out of date, IDVA’s Veteran Service Officers help with VA claims at no cost (1-800-437-9824).
Sources for this section: 35 ILCS 200/15-169, as amended by Public Act 103-0596; the Cook County Assessor, Veterans with Disabilities, Returning Veterans and exemptions; the Cook County Treasurer (mid-year proration); the Illinois Department of Revenue, property tax relief; IDVA Veteran Service Officers.
With no down payment required, the cash you need for a VA purchase is mostly closing costs and reserves, and several Illinois programs can help. Programs change and each has income, price and credit limits, so ask your lender which ones it offers and whether it allows them with a VA loan.
IHDAccess Home (Illinois Housing Development Authority, launched March 11, 2026): 6 percent of the price, up to $15,000, for the down payment or closing costs, as a 0 percent second loan repaid when you sell, refinance or reach 30 years. VA-guaranteed first mortgages are eligible, and you qualify as a first-time buyer, as a qualified veteran (with a COE or a DD214 showing an honorable discharge) or by buying in a targeted area, so a veteran does not have to be a first-time buyer. IHDA’s programs require a 640 credit score, a contribution of your own of the greater of 1 percent or $1,000, a debt-to-income ratio of 50 percent or less, and a homebuyer class. IHDA’s older Access products (forgivable, deferred and repayable) are still listed too.
Chicago HomeGrown (City of Chicago, opened June 8, 2026): forgivable grants of up to $70,000 or $50,000 depending on where the home is, scaled by income and capped at 25 percent of the price, for single-family homes, condos, townhomes and two-flats. It requires a fixed-rate first mortgage, 1 percent of your own funds, a debt-to-income ratio of 38 percent or less, at least 8 hours of counseling with a HUD-certified agency, and five years living in the home. The program materials do not mention VA loans, so ask the administrator; one administrator also warns of a possible waitlist.
Cook County Down Payment Assistance (third round, funding from July 20, 2026): 5 percent of the first loan, up to $25,000, forgiven over five years, with a 620 credit score minimum and an income limit of 120 percent of area median income ($145,800 for a household of four) outside certain designated areas. Repeat buyers are allowed. Its materials do not mention Chicago addresses or VA loans by name, so confirm both.
A mortgage credit certificate turns part of your mortgage interest into a federal tax credit. The City of Chicago’s TaxSmart program offers 25 percent of your interest, up to $2,000 a year, within income and price limits; IHDA’s has been suspended since 2020. Federal law lets a veteran skip the first-time buyer rule once, but we could not confirm how TaxSmart applies it; ask.
We could not confirm any purchase program just for veterans active in Chicago in October 2026, and IDVA does not run one.
Sources for this section: the Governor’s office, IHDAccess Home; IHDA, homebuyer programs, income and price limits and FAQ; the City of Chicago’s HomeGrown program terms, Chicago REALTOR on its launch, and NHS Chicago; Cook County, Down Payment Assistance Program; the City of Chicago, TaxSmart; 26 U.S.C. 143(d)(2)(D); IDVA, real estate benefits.
Fair housing. In Illinois it is unlawful to discriminate in a real estate transaction, including buying a home and applying for a mortgage, because of military status (active duty, veterans, reservists and the Illinois Guard), an unfavorable military discharge (other than one characterized as RE-4 or dishonorable), or source of income, which the Illinois Department of Human Rights says includes veterans’ benefits and housing vouchers such as HUD-VASH. Chicago’s Fair Housing Ordinance covers military status and source of income, and Cook County’s Human Rights Ordinance covers military discharge status and source of income. The federal Fair Housing Act does not list either, so these state and local protections are the ones that apply. A charge with the Illinois Department of Human Rights must be filed within one year. No agency has said that a seller declining an offer because of VA financing terms is discrimination on its own; turning a buyer away because they served is.
The Servicemembers Civil Relief Act (SCRA). Its 6 percent interest cap applies to debts you took on before entering service, including a mortgage, for your service plus one year, after you send written notice with your orders; a VA loan taken out while already on active duty is not covered. A pre-service mortgage cannot be foreclosed during service or for a year after without a court order. If you rent now, you can end a lease signed before entering service, or when you receive orders for a permanent change of station or a deployment of 90 days or more, with written notice and a copy of the orders. Buying a home is not, by itself, a reason to end a lease, so time your closing to your lease (our renter’s guide covers moving out well). The Illinois Service Member Civil Relief Act extends similar protections to Illinois Guard members called to duty; the Illinois Attorney General’s Military and Veterans Rights Bureau answers at 1-800-382-3000.
Sources for this section: the Illinois Human Rights Act, 775 ILCS 5/1-103; the Illinois Department of Human Rights on housing and source of income; the Chicago Commission on Human Relations, military status; the Cook County Commission on Human Rights, guidance; HUD, the Fair Housing Act; 50 U.S.C. 3937, 3953 and 3955; the Illinois Attorney General, Illinois Service Member Civil Relief Act.
Adapting a home. Veterans with certain severe service-connected disabilities can get a Specially Adapted Housing grant (up to $126,526 in fiscal 2026, usable up to six times) to buy, build or change a home, or a Special Home Adaptation grant (up to $25,350). A Temporary Residence Adaptation grant can adapt a family member’s home you are living in for a while. Through VA health care, the HISA grant pays for medically needed changes such as ramps and roll-in showers (up to $6,800 for service-connected conditions, $2,000 otherwise).
Taking over a VA loan. A VA loan can be assumed by any creditworthy buyer, veteran or not, with the lender’s approval and a 0.5 percent fee. With today’s rates, a seller’s older VA loan at a low rate can be worth asking about. The seller’s entitlement stays tied to that loan unless the buyer is an eligible veteran who substitutes their own.
Refinancing later. An Interest Rate Reduction Refinance Loan moves an existing VA loan to a lower rate, or from adjustable to fixed, with a 0.5 percent funding fee.
Sources for this section: VA, disability housing grants; VA Prosthetic and Sensory Aids Service, HISA; 38 U.S.C. 3714 (assumptions); VA, interest rate reduction refinance loan.
VA loans take forever and fall apart.
FactThe last public industry breakdown we found (ICE Mortgage Technology, September 2021) had VA purchase loans closing in 56 days on average, against 49 for conventional and 52 for FHA, and closing about as often (80.6 percent against 81.1 percent conventional). About a week longer, about the same odds.
The seller has to make every repair.
FactSince 2022 the buyer may pay for repairs the appraisal requires and for the termite report. Who pays is a term of the contract.
You can only use it once.
FactEntitlement is restored when the loan is paid off and the home sold, when a veteran assumes and substitutes, or once when the loan is paid off and you keep the home. A later use only raises the funding fee.
You need excellent credit.
FactThe VA sets no minimum score. It looks at your debt-to-income ratio (a 41 percent guideline, with room above it for strong files) and the income left over each month. Lenders add their own minimums, so ask each one.
There is a cap on how much you can borrow with no money down.
FactWith full entitlement there has been no VA loan limit since 2020. The lender’s approval of your income is the limit.
Sources for this section: ICE Mortgage Technology, Origination Insight Report, September 2021 (a hosted copy); VA Circular 26-22-11; 38 U.S.C. 3702(b); 38 CFR 36.4340 (underwriting); VA Circular 26-19-30.
Request it online, or let your lender pull it.
Get pre-approved. Ask about the funding fee (and whether you are exempt), each lender’s credit minimum, and which assistance programs it offers with a VA loan.
It sets how your agent is paid, before you tour.
For a condo, check the building on the VA’s list first. For a two-flat, run the rent numbers.
On the Multi-Board contract, with the VA terms in it: the appraisal protection, any seller concessions (up to 4 percent) and your earnest money.
Customarily five business days in Chicago, while your attorney and the seller’s settle any changes.
Your own home inspection is separate from the appraisal and covers far more. Add the termite inspection.
It sets the value and lists any required repairs; the Notice of Value follows.
The city transfer tax is paid at closing.
The Homeowner exemption, and the Veterans with Disabilities exemption if you have a rating.
Want the whole buying process in more depth? Our buyer’s guide, financing guide, contract guide and closing costs guide go further, and credit, explained helps if your score needs work first.
Usually, yes. With a VA-guaranteed loan and full entitlement there is no down payment as long as the price is not above the appraised value, and no monthly mortgage insurance. You still need the lender’s approval, the funding fee (unless you are exempt) and closing costs, which the seller can help pay.
For a purchase: 2.15 percent on a first use with less than 5 percent down (3.3 percent after the first use), 1.5 percent with 5 to under 10 percent down, and 1.25 percent with 10 percent or more. You can pay it at closing or add it to the loan.
Veterans receiving VA compensation for a service-connected disability, those eligible for it but receiving retirement or active-duty pay instead, surviving spouses receiving DIC, service members with a proposed or memorandum rating before closing, and active-duty Purple Heart recipients.
Not with full entitlement: since 2020 the VA guarantees 25 percent of any amount, and the lender’s approval of your income sets the limit. If part of your entitlement is still in use, the 2026 Cook County one-unit conforming limit of $832,750 is used to figure how much you can borrow with nothing down.
Yes. A VA loan can buy a building of up to four units if you live in one of them; rent from the other units counts toward your income if you show rental experience or use a management company and keep six months of payments in reserve. A condo must be in a VA-approved building, which you can check on the VA’s condo report.
The Veterans with Disabilities exemption takes $2,500 of equalized assessed value off for a 30 to 49 percent rating, $5,000 for 50 to 69 percent, and the first $250,000 for 70 percent or more. There is also a Returning Veterans exemption of $5,000 for two years, a Specially Adapted Housing exemption, and the Homeowner exemption anyone who lives in the home gets.
IHDAccess Home, launched in March 2026, lists VA-guaranteed loans as eligible and gives 6 percent of the price, up to $15,000, as a 0 percent deferred second loan. Qualified veterans do not have to be first-time buyers. Income and price limits apply, and your lender has to offer the program.
Since August 10, 2024, a VA circular allows a veteran to pay a reasonable and customary buyer’s agent charge, as long as it is not financed and appears on the Closing Disclosure. It remained in effect as of October 2026. A seller paying the buyer’s agent does not count as a seller concession.
Yes. Entitlement is restored when the loan is paid off and the home sold, when an eligible veteran assumes the loan and substitutes their entitlement, or once when the loan is paid off and you keep the home. A later use carries a higher funding fee with less than 5 percent down.
No, but the seller can. Seller concessions can reach 4 percent of the home’s value, and the seller paying normal closing costs and customary discount points does not count toward that 4 percent.
We walk veterans through a VA purchase from the first conversation to the closing table, introduce you to VA-approved lenders our clients have closed with, and write offers that sellers take seriously. Tell us what you are looking for.
Contact The Boulevard Group