Mortgage protection basics

What Is VA Mortgage Insurance, and Who Qualifies for Veterans' Mortgage Life Insurance (VMLI)?

VA mortgage insurance can mean three things: no PMI on VA loans, VMLI for Veterans with an SAH grant (up to $200,000), or private mortgage protection.

Reviewed by Brian Carrozzi

Founder, RestAssured · Licensed life insurance agent

Updated October 22, 2026 · How we write and review

Short answer: “VA mortgage insurance” usually means one of three things. VA-backed home loans don’t require monthly mortgage insurance, though most borrowers pay a one-time funding fee. Veterans’ Mortgage Life Insurance (VMLI) is a VA program that pays up to $200,000 to your lender if you die, but only for severely disabled Veterans who received a Specially Adapted Housing grant. Everyone else who wants their mortgage covered at death would look at private mortgage protection life insurance.

Which kind of “VA mortgage insurance” do you mean?

The words sound alike, but these are very different things. One is a loan fee, one is a VA life insurance program for a small group of Veterans, and one is private life insurance.

	VA funding fee	VMLI (VA program)	Private mortgage protection
What it is	One-time fee on most VA-backed loans	Decreasing-term mortgage life insurance from VA	Life insurance, usually term, from a private insurance company
Who it’s for	Most VA loan borrowers, unless exempt	Severely disabled Veterans and service members with an SAH grant	Most homeowners, Veteran or not, who qualify with the insurer
What it does	Helps fund the VA loan program	Pays toward the mortgage if you die	Pays a death benefit if you die during the term
Who gets the money	VA (paid at closing or added to the loan)	The mortgage lender, directly	Usually the beneficiary you name
Maximum	Set as a percent of the loan	$200,000	Varies by insurance company and state

Do VA loans require mortgage insurance (PMI)?

No. VA says “the VA home loan program doesn’t require down payments or monthly mortgage insurance.”

What most VA borrowers pay instead is the VA funding fee, which VA describes as “a one-time payment that the Veteran, service member, or survivor pays.” VA News explains that the fee “helps offset the cost of the program to taxpayers,” and that borrowers can pay it at closing or roll it into the loan amount.

For a first-time VA purchase loan with less than 5% down, VA lists the fee as 2.15% of the loan. It drops to 1.5% with 5% or more down and 1.25% with 10% or more down. After first use, the fee with less than 5% down is 3.3%.

Who doesn’t have to pay the VA funding fee?

According to VA, you don’t pay the funding fee if any of these apply:

You’re receiving VA compensation for a service-connected disability.
You’re eligible for that compensation but are receiving retirement or active-duty pay instead.
You’re receiving Dependency and Indemnity Compensation (DIC) as the surviving spouse of a Veteran.
You’re a service member who received a proposed or memorandum rating before the loan closing date saying you’re eligible for compensation because of a pre-discharge claim.
You’re an active-duty member of the Armed Forces and, on or before closing, you provide evidence that you received a Purple Heart.

Keep in mind that neither PMI nor the funding fee pays off your home if you die. That takes life insurance.

What is Veterans’ Mortgage Life Insurance (VMLI)?

VMLI is VA’s own mortgage life insurance. VA describes it as “up to $200,000 in mortgage life insurance—paid directly to the bank or other lender that holds your mortgage.”

It is a decreasing-term policy. VA says your coverage “will equal the amount you still owe on your mortgage, but won’t be more than $200,000.” VA’s insurance booklet adds that once the balance drops and coverage goes down, the reduced coverage can’t be reinstated for that home.

Who is eligible for VMLI?

VA says you must meet all of these requirements:

You have a severe disability that VA has concluded was caused, or made worse, by your service.
You received a Specially Adapted Housing (SAH) grant.
You hold the title to the home.
You have a mortgage on the home.
You’re under 70 years old. VA says “you must apply for VMLI before your 70th birthday.”

The SAH requirement is what narrows this program. VA’s booklet says SAH grants go to Veterans and service members entitled to compensation for certain service-connected, permanent and total disabilities, such as loss of use of both legs or a severe burn injury. If you haven’t received an SAH grant, you can’t get VMLI.

How do VMLI premiums work?

VA doesn’t publish one flat rate. It says your premium depends on:

Your age
Your mortgage balance
The number of mortgage payments you have left
Your coverage amount

VA offers a VMLI Premium Calculator on its website for estimates. According to VA’s booklet, premiums are deducted from your monthly VA compensation or pension if you receive it. Otherwise you can pay VA’s Insurance Center directly, monthly, quarterly, twice a year or once a year.

When does VMLI coverage end?

VA’s insurance booklet lists these reasons VMLI coverage ends:

The mortgage is paid in full.
You no longer own the property that secures the loan.
You ask to cancel it.
You don’t send VA required information.
You stop paying premiums.

If you sell the home and buy another one, the booklet says you become eligible again for the maximum coverage on the new home. Refinancing works differently, so check with VA before you refinance.

How do you apply for VMLI?

VA lays out the steps this way:

Apply for an SAH grant first. VMLI is only available after you’ve received one.
Talk with your loan guaranty agent. VA says this agent will tell you whether you qualify for VMLI.
Complete the VMLI Statement. VA says the loan guaranty agent will help you fill out the Veterans’ Mortgage Life Insurance Statement (VA Form 29-8636).

Remember the age deadline: you must apply before your 70th birthday.

What if you don’t qualify for VMLI?

Most Veterans with a mortgage won’t qualify for VMLI, because it requires an SAH grant. If you want coverage that could pay off or keep paying the mortgage if you die, the usual option is private mortgage protection or term life insurance. Our guide to what mortgage protection insurance is explains how these policies work.

The New York State Department of Financial Services notes that decreasing term policies are “often sold as mortgage protection with the amount of insurance decreasing as the balance of the mortgage decreases,” and that “the proceeds of the policy can be used to pay off the mortgage.”

A few differences from VMLI to keep in mind:

Who gets paid. VMLI pays only the lender. With most private policies you name a beneficiary, who decides how to use the money.
Level or decreasing. Private coverage may be level, where the benefit stays the same, or decreasing, like VMLI. Options vary by insurance company and state.
Who can buy. You don’t need a disability rating or SAH grant. Pricing typically depends on your age, health, tobacco use, coverage amount and term length.
Using both. Some Veterans have VMLI and also carry other life insurance. VA’s other programs are covered in our guide to VA life insurance for Veterans.

A licensed agent can walk you through private options for your loan balance, age and state. Here’s how calling RestAssured works.

RestAssured is not a lender, an insurance company or an insurance agency, and isn’t affiliated with the U.S. Department of Veterans Affairs or any mortgage lender or servicer. RestAssured connects callers with independently licensed insurance agents.

Frequently asked questions

Do VA loans have mortgage insurance?

VA says its home loan program doesn’t require monthly mortgage insurance. Instead, most borrowers pay a one-time VA funding fee, which can be paid at closing or rolled into the loan.

Who is eligible for Veterans' Mortgage Life Insurance (VMLI)?

According to VA, you must have a severe service-connected disability, have received a Specially Adapted Housing (SAH) grant, hold the title to the home, have a mortgage on it, and be under 70.

How much does VMLI pay?

VMLI pays up to $200,000, or the amount you still owe on the mortgage if that is less. VA pays the money directly to the bank or lender that holds your mortgage, not to your family.

What are veterans mortgage life insurance rates?

VA says VMLI premiums depend on your age, your mortgage balance, the number of payments left and the coverage amount. VA offers a VMLI Premium Calculator for estimates, and premiums are generally deducted from your monthly VA compensation or pension.

Is there mortgage protection insurance for veterans who don't qualify for VMLI?

Yes. Private mortgage protection or term life insurance is open to Veterans and non-Veterans alike, and pricing and features vary by insurance company and state.

Sources

This article is for general education. Policy features, prices and eligibility vary by insurance company and state; your agent will explain the specific terms of any policy before you apply.