PCSing to Holloman: VA Loans for Holloman Families
Published 9 November 2026
A VA-backed home loan lets most eligible service members and veterans buy a home near Holloman with no down payment and no monthly mortgage insurance. You still need a Certificate of Eligibility, approval from a VA-approved lender, money for closing costs, and in most cases a one-time VA funding fee, which is 2.15% of the loan for a first-time user putting less than 5% down. This installment of my PCSing to Holloman series walks through what "zero down" really costs and how entitlement works, in plain words.
How does a VA loan work for a Holloman move?
The VA does not lend the money in most cases. A private lender makes the loan, and the VA guarantees part of it, which is why lenders can offer no down payment. According to the VA home loan program, nearly 90% of VA-backed loans are made with no down payment.
Here is what the VA says you need for a VA-backed purchase loan:
- A Certificate of Eligibility (COE), which you can request through VA or have your lender pull for you
- Credit and income that meet your lender's standards
- A plan to live in the home you are buying, since this is a loan for your own home, not a rental purchase
A VA loan also has no private mortgage insurance (PMI), which conventional loans usually require when you put down less than 20%. That can make a real difference in your monthly payment.
What does "zero down" really cost?
Zero down does not mean zero cash. Plan for three kinds of costs: the VA funding fee, closing costs, and prepaid items like homeowners insurance and property taxes that get set up at closing.
The funding fee is a one-time charge set by the VA. You can pay it at closing or roll it into the loan. Here are the current rates for purchase loans, from the VA's funding fee and closing costs page:
| Your down payment | First use | After first use |
|---|---|---|
| Less than 5% | 2.15% | 3.3% |
| 5% or more | 1.5% | 1.5% |
| 10% or more | 1.25% | 1.25% |
To put that in dollars, on a $250,000 loan with nothing down, a first-time user's funding fee would be $5,375 (2.15% of $250,000). The fee is figured on the loan amount, not the purchase price.
You will not pay the funding fee at all 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, or if you are an active-duty service member who provides proof of a Purple Heart on or before closing. The VA lists a few other exemptions, so ask your lender to check.
Closing costs are a separate bill. The VA notes that the buyer and seller can negotiate who pays some of them, which is something I always talk through with my buyers when we write an offer.
What is VA entitlement, and is there a loan limit?
Entitlement is the amount the VA will guarantee to your lender, and it shows on your COE. If you have full entitlement, there is no VA loan limit. You can borrow as much as a lender approves you for, as long as the appraisal supports the price.
You might not have full entitlement if you still have a VA loan on another home, for example the house you bought at your last base. In that case, the VA uses the county loan limit, which matches the FHFA conforming loan limit, to work out how much you can borrow with no down payment. The FHFA's 2026 baseline limit for a one-unit home is $832,750, and you can confirm Otero County's figure on FHFA's county list. Your lender will do this math with you.
Can I buy a home before I get to Holloman?
Yes, many families start the process from their current base. You can request your COE, get preapproved with a VA-approved lender and tour homes by video before you arrive. Remember that a VA loan is for a home you will live in, so talk with your lender about how and when you plan to move in.
One tip from experience: an appraisal and a home inspection are not the same thing. The appraisal checks the value for the lender. A home inspection checks the condition for you. I always recommend a separate inspection, especially on older homes.
What does this mean for Holloman families?
If you expect to be here for a few years, a VA loan can make buying in Alamogordo very doable, even if you have not saved a big down payment. Start by figuring out your budget with my BAH and housing budget guide, then compare your options in my on-base vs off-base housing post. If cash for closing is tight, my down payment help guide covers programs that may help, and my Holloman AFB relocation guide pulls the whole move together.
Frequently Asked Questions
Can I buy a home near Holloman with no down payment?
Yes, if you are eligible for a VA-backed loan and a lender approves you. The VA says nearly 90% of VA-backed loans are made with no down payment.
How much is the VA funding fee in 2026?
For a first-time purchase with less than 5% down, it is 2.15% of the loan amount. It drops to 1.5% with 5% down and 1.25% with 10% down.
Who does not have to pay the VA funding fee?
Veterans who receive VA compensation for a service-connected disability are exempt, along with some others the VA lists. Active-duty members who show proof of a Purple Heart on or before closing are also exempt.
Is there a VA loan limit in Otero County?
There is no VA loan limit if you have full entitlement. If you have partial entitlement, the county conforming loan limit is used to figure your no-down-payment amount.
Do VA loans require mortgage insurance?
No, VA loans do not require private mortgage insurance. Most buyers pay a one-time funding fee instead.
Information comes from the U.S. Department of Veterans Affairs and the Federal Housing Finance Agency, checked 9 November 2026. I am a real estate agent, not a lender or financial advisor, so confirm the details for your situation with a VA-approved lender.