Can I Qualify For VA Loan With High DTI | 2022 VA Guidelines

Gustan Cho Associates are mortgage brokers licensed in 48 states

In this blog, we will discuss and cover one of the most frequently asked questions we receive daily can I qualify for VA loan with high DTI. VA loans are the best mortgage loan program in the United States. There is no down payment required and there is no monthly mortgage insurance premium on VA loans. Interest Rates on VA mortgages are lower than any other loan program due to the government guarantee. The U.S. Government limits VA loans for veteran borrowers only with a certificate of eligibility (COE). Veteran borrowers can qualify for VA Loans with high debt to income ratios and lower credit scores.

Can I Qualify For VA Loan With High DTI?

There is no debt to income ratio requirements on VA loans. So why do veteran borrowers get turned down by VA Lenders due to high debt to income ratios? It is because most lenders have VA lender overlays on debt-to-income ratios. The answer is yes to the question Can I Qualify For VA loan with a high DTI. The Department of Veteran Affairs has one of the most lenient mortgage guidelines out of all mortgage loan programs.

Rewarding Veterans Due To Their Service To Our Country With VA Loans

The United States of Department Affairs realizes that members of the U.S Armed Services have lower credit stores than civilian workers due to them having the chance of being deployed in wartime.  How can a veteran make timely monthly payments on their debt obligations when they are deployed during wartime and make their monthly mortgage payments on time when they are in combat? The Armed Services are well aware of this and have implemented many more different VA Guidelines for veterans of the armed services.

How Can I Qualify For VA Loan With High DTI?

Can I Qualify For VA Loan With High DTI? VA Loans are the best residential mortgage loan programs out there. Not all borrowers qualify for a VA Loan. Only veterans of the United States Armed Services, with a Certificate of Eligibility, can qualify for a VA loan.

How Can I Qualify For VA Loan With High DTI With Low Credit Scores?

Here are the requirements to qualify for VA mortgage loans:

  • To qualify for VA loans, the borrower needs to have served in a branch of the United States Military.
  • Veteran borrowers need an honorable discharge and a valid Certificate of Eligibility.
  • A Certificate of Eligibility is also referred to as a COE.
  • There is no debt to income ratio requirements with VA loans.
  • However, VA Loan does have VA Residual Income Requirements.
  • There is no maximum loan limit on VA loans.

There are no minimum credit score requirements on VA loans

VA Guidelines Versus VA Lender Overlays

Lenders With Overlays On VA Mortgages

The Department of Veteran Affairs (VA) does not have any debt to income ratio requirements or credit score requirements. There are two separate types of VA Eligibility Requirements. VA Guidelines from the U.S. Department of Veteran Affairs. VA Lender Overlays are additional VA Lending Requirements that are implemented by each individual lender.

Can I Qualify For VA Loan With High DTI With VA Lenders With Overlays?

Just because a borrower meets VA Guidelines does not mean that they qualify with all lenders. Each lender can have its own overlays on VA loans. For example, many Lenders may have overlays on DTI where they may cap it at 41%. They may also have overlays on credit scores where the lender may require a 620 credit score. Gustan Cho Associates do not have any overlays on VA loans. One of our loan officers at Gustan Cho Associates recently closed a VA loan for a borrower who had a 580 FICO credit score and a 59% debt to income ratio and outstanding collection accounts.

Can I Qualify For VA Loan With High DTI With Less Than Perfect Credit?

Gustan Cho Associates has no overlays on VA loans. We just go off the automated findings of the Automated Underwriting System (AUS). Only spouses of a Veteran can become co-borrowers on VA loans. Borrowers do not have to pay off outstanding collections and charge offs to qualify for VA loans. There is a two-year waiting period to qualify for a VA loan after a Chapter 7 Bankruptcy discharge date. There is a two-year waiting period to qualify for a VA loan after the following:

  • Foreclosure
  • Deed in lieu of foreclosure
  • Short sale

Deferred student loans that are deferred for more than 12 months are exempt from debt to income ratio calculations.

Benefits of VA Loans

VA does not require any down payment on a home purchase and allows 100% financing. VA allows up to 100% cash-out refinance on single-family homes. VA home buyers do not have to worry about coming up with closing costs because closing costs can be covered with seller’s concessions and/or lender credit. VA allows up to 4% sellers concessions from home sellers and/or lenders, credit by the lender to cover closing costs.

Mortgage Insurance Guidelines on VA Loans

Qualifying For VA Loan With High DTI With Lender With No Overlays

There is no annual VA mortgage insurance premium with VA loans. There is a funding fee with VA loans. However, there is a one-time funding fee that can be rolled into the balance of the VA loan. VA Loans has one of the lowest mortgage interest rates out of any loan program because of the guarantee by the Veterans Administration. VA loans are for one to four-unit owner-occupied properties only. Veterans cannot use VA entitlement on second homes or investment homes. Gustan Cho Associates close VA Loans 21 days or less.

Solutions on How Can I Qualify For VA Loan With High DTI?

Many of our viewers who are reading this blog are probably scratching their heads and really confused because they were told the following by other VA Mortgage Companies and/or Banks have lender overlays. Lender overlays are additional lending requirements that are above and beyond the minimum VA agency mortgage guidelines.  The maximum debt to income ratio to qualify for VA loans required by most lenders is 41% DTI to 43% DTI. The minimum credit score to qualify for a VA loan is 640. Borrowers cannot have any outstanding collection accounts and/or charge-off accounts to qualify for VA loans. Need a minimum of three credit tradelines to qualify for VA loans.

Best VA Lenders for High Debt to Income Ratio Borrowers

The good news is that Gustan Cho Associates has no lender overlays on VA loans. Over 75% of our clients at Gustan Cho Associates are folks who could not qualify at other lenders.

Can I Qualify For VA Loan With High DTI if Lender Says I do Not Qualify?

All of the above VA lending requirements are not those of the VA but are lender overlays. Gustan Cho Associates is a VA Lender with no overlays on VA loans. Lenders can have their own overlays on VA Loans and do not have to follow VA Guidelines. Lenders do have to meet minimum VA Guidelines but they can have higher standards and requirements than VA Guidelines.

Can I Qualify For VA Loan With High DTI  After Chapter 13 Bankruptcy

Most Lenders have VA Lender Overlays with qualifying for VA Loans During And After Chapter 13 Bankruptcy. Here are VA Guidelines During & After Chapter 13 Bankruptcy. Veteran Borrowers can qualify for VA loans one year into a Chapter 13 Bankruptcy Repayment Plan. There is no waiting period after Chapter 13 Bankruptcy Discharge Date to qualify for VA loans. A large percentage of our borrowers at Gustan Cho Associates are veteran borrowers who are in a Chapter 13 Repayment Plan and/or who just got their Chapter 13 Bankruptcy discharged. Borrowers who meet VA Lending Guidelines but the lender, they consulted with having VA Lender Overlays, stop looking further, and call Gustan Cho Associates at 262-716-8151 or text us for a faster response. Or email us at [email protected] Gustan Cho Associates do not have any lender overlays on VA loans. We are available 7 days a week, on evenings, weekends, and holidays.