Not all Florida VA lenders have the same lending requirements on VA loans. Not all Florida VA lenders do manual underwrites. Gustan Cho Associates are Florida VA lenders with no lender overlays on VA loans. VA loans are the best loan program in the nation. Lenders offer VA loans with no down payment requirements and 100% financing with no mortgage insurance premium requirement at competitive mortgage rates. The VA Funding Fee can be rolled into the loan balance. Many home buyers often get confused why so many Florida VA lenders have different lending requirements on VA loans. The U.S. Veterans Administration is the federal agency that is in charge of the agency mortgage guidelines on VA loans. The VA has lenient agency mortgage guidelines on VA loans than any other loan program. VA mortgages are not for everyone. Only eligible active and/or retired members of the United States Armed Forces and surviving spouses of eligible military members with a valid certificate of eligibility (COE) are eligible for a VA loan. Mortgage rates on VA loans are lower than any other mortgage loan program due to the government guarantee from the VA.
About Florida VA Lenders And VA Loans
The United States Department of Veterans Administration is the federal agency that insures and guarantees lenders on VA loans. VA mortgages were created in 1944 and signed by President Franklin D. Roosevelt. The purpose of Congress creating VA loans was to reward active and retired members of the U.S Armed Services and eligible surviving spouses of veterans the opportunity to purchase a home with a mortgage backed by the federal government with 100% financing and lenient mortgage guidelines. The VA loan program is commonly referred to as the GI Bill. VA mortgages have been successful since their launch in helping veterans realize the dream of homeownership. VA loans have helped millions of veterans and their families realize the dream of homeownership become a reality. Not all veterans qualify for VA loans. Members need to have full entitlement. Only members with a certificate of eligibility with full entitlement are eligible to qualify for VA loans. Eligible members can use their VA loan benefits multiple times. There are instances where veterans can have more than one VA loan at the same time.
Not All Florida VA Lenders Have The Same VA Loan Requirements
There are thousands of Florida VA lenders. However, not all Florida VA lenders have the same VA loan requirements on VA loans. Most lenders have higher lending requirements that are above the minimum agency mortgage guidelines. These higher VA loan requirements by individual lenders are called lender overlays. The team at Gustan Cho Associates proudly servers our members of the United States Armed Services with VA loan programs in Florida with zero lender overlays. Gustan Cho Associates has no lender overlays on VA loans. We have helped thousands of active and retired members of our U.S Military get approved and close on VA loans with credit scores as low as 500 FICO, borrowers with bad credit, homebuyers in Chapter 13 Bankruptcy repayment plan, and borrowers who were denied VA loans from other mortgage companies. Over 75% of our borrowers at Gustan Cho Associates are folks who could not qualify at other mortgage companies due to their lender overlays or gotten a last-minute mortgage loan denial. Gustan Cho Associates has a national reputation of being able to do VA loans other lenders cannot do.
Understanding VA Agency Guidelines Versus Lender Overlays By Florida FHA Lenders
VA loans have more lenient mortgage requirements than any other mortgage loan program. However, most lenders have higher lending requirements that exceed the minimum agency mortgage requirements mandated by the Veterans Administration on VA loans. It is very important to understand the basic VA loan requirements of the Veterans Administration for borrowers who are applying for a VA loan. Borrowers meeting the agency VA loan requirements who are told they do not qualify from a lender but meet the agency guidelines can qualify for a VA loan at a mortgage lender with no lender overlays. Gustan Cho Associates is one of the very few mortgage companies licensed in Florida with no lender overlays on VA loans.
Gustan Cho Associates Has Zero Lender Overlays On VA Loans
Gustan Cho Associates has zero lender overlays on VA mortgages. We just go off the minimum VA loan requirements by the Veterans Administration and have zero lender overlays on VA loans. Over 75% of our borrowers at Gustan Cho Associates are folks who could not qualify at other mortgage companies due to lender overlays. The team at Gustan Cho Associates has helped countless borrowers with credit scores down to 500 FICO qualify for VA loans in Florida.
VA Agency Mortgage Guidelines: Minimum VA Loan Requirements By The Veterans Administration
VA loans have one of the most lenient agency mortgage guidelines versus other government and conventional loans. However, most Florida VA lenders impose higher lending standards on VA loans. Florida VA lenders can have any type of lender overlays on VA loans. It is up to the individual mortgage company to set the lender overlays on guidelines they feel are too risky for them.
VA Loan Requirements On Credit Scores
There are no minimum credit score requirements on VA mortgages. As long as the borrower can get an approve/eligible per automated underwriting system, lenders with no lender overlays can approve and fund the VA loan. Agency mortgage guidelines on VA loans are mandated by the Veterans Administration do not require a minimum credit score requirement on VA loans. Gustan Cho Associates get countless calls from qualified veterans who were told by other lenders they do not qualify for a VA loan due to not having a 620 or 640 credit score. The credit score requirement is not the requirement mandated by the VA. It is the individual lender that requires this credit score. The lender can have higher lending requirements above and beyond the minimum guidelines of the VA.
Lender Overlays On Credit Scores By Florida VA Lenders
Most lenders have a 620 or higher credit score requirement on VA loans. This holds true even though there are no minimum credit score requirements on VA loans. The credit score requirements are called lender overlays by the individual mortgage company. Gustan Cho Associates has zero lender overlays on VA loans. We just go off the automated findings of the automated underwriting system. Borrowers who cannot get an approve/eligible per AUS can qualify for a VA loan via manual underwriting. VA manual underwriting guidelines apply. Borrowers can qualify for VA loans with outstanding collections and charged-off accounts. However, many VA Florida lenders have overlays on collection accounts and require borrowers to pay them off.
Debt To Income Ratio Caps On VA Loans
There is no maximum debt to income ratio on VA loans. Even though VA does not have a maximum DTI cap on VA loans, most lenders will impose a 40% to 50% debt to income ratio cap on VA loans. Gustan Cho Associates has gotten countless automated underwriting system approvals for borrowers with under 600 credit scores and debt to income ratios that surpass 60% DTI. The key to getting an approve/eligible per automated underwriting system is residual income. Borrowers with high residual income can get an approve/eligible per automated underwriting system with debt to income ratio exceeding 60% DTI.
VA Manual Underwriting Guidelines
VA and FHA loans are the only two home mortgage loan programs that allow manual underwriting. Manual underwriting is when a human underwriter analyzes and underwrites the file. Borrowers with refer/eligible per AUS are candidates for VA manual underwriting. The only major difference between manual and automated findings underwriting is the debt to income ratio caps. VA manual underwriting caps debt to income ratio depending on the number of compensating factors the borrower has. HUD’s manual underwriting and the VA’s manual underwriting guidelines are exactly the same. However, VA manual underwriting guidelines are much more lenient than HUD’s FHA manual underwriting guidelines.
Florida VA Manual Underwriting On VA Loans
Here is the debt to income ratio on manual underwrite VA loans:
- 31% front-end and 37% back-end debt to income ratio with zero compensating factor
- 37% front-end and 47% back-end debt to income ratio with one compensating factors
- 40% front-end and 50% back-end debt to income ratio with two compensating factors
Mortgage underwriters have a lot of underwriter discretion on VA manual underwrites. Underwriters can approve borrowers above the recommended manual underwriting debt to income ratio guidelines if the borrower has strong compensating factors. Underwriters can approve a manual underwriting file exceeding 50% debt to income ratio if they feel the borrower has strong compensating factors.
VA Mortgage Guidelines On Compensating Factors
There are certain factors that can be used for compensating factors. Below are the items mortgage underwriters will consider compensating factors when underwriting VA manual underwriting loans:
- Low payment shock of 5% new mortgage payment from rental payment
- Low debt to income ratio
- History of the borrower’s job longevity, education training, constant promotion over the years
- History of payment patterns over the past two years
- Low credit card balances
- History of the borrower’s saving habits and reserves
- Having a second job that is seasoned for at least a year but not used as qualifying income
- The borrower has a non-borrowing spouse with a full-time job and income that is not used as qualifying income is a compensating factor
- Large down payment on home purchase even though there is no down payment required on VA loans
Mortgage underwriters have a lot of power and discretion on manual underwriting.
VA Manual Underwriting Guidelines On Late Payments
One of the great benefits of manual underwriting on VA loans is mortgage underwriters will look at files carefully and letters of explanation will be carefully analyzed and reviewed. Manual underwrites require 24 months of timely payments and no late payments after bankruptcy and/or foreclosure. If you have late payments after bankruptcy or late payments in the past 24 months, the mortgage underwriter may allow that with a great letter of explanation and documentation. Gustan Cho Associates have helped many borrowers with late payments in the past 24 months and late payments after bankruptcy and/or a housing event on manual underwriting borrowers. Many Florida FHA lenders will not do manual underwriting as part of their lender overlays.
VA Loans After Bankruptcy And Foreclosure
There is a two-year waiting period to qualify for VA loans after Chapter 7 Bankruptcy discharged date, and recorded date of foreclosure, deed in lieu of foreclosure, and short-sale. Borrowers can qualify for a VA loan during Chapter 13 Bankruptcy repayment plan with trustee approval and manual underwriting. There is no waiting period after the Chapter 13 Bankruptcy discharge date. Needs to be a manual underwrite if the Chapter 13 Bankruptcy discharged date has not been seasoned for twenty-four months. The team at Gustan Cho Associates are experts helping homebuyers after bankruptcy and/or a housing event.
Florida VA Lenders With No Lender Overlays On VA Loans
Gustan Cho Associates is a mortgage company licensed in multiple states including Florida with no lender overlays on VA loans. Over 75% of our borrowers are folks who could not qualify at other mortgage companies due to lender overlays. The team at Gustan Cho Associates has helped thousands of borrowers qualify and get approved for VA loans with credit scores down to 500 FICO, prior bad credit, over 60% debt to income ratio, other types of credit/income issues. If you have any questions about the content on this blog or need to qualify for a VA loan with a no overlay lender in Florida, please contact us at 800-900-8569 or email us at firstname.lastname@example.org. Text us for a faster response. The team at Gustan Cho Associates is available 7 days a week, evenings, weekends, and holidays.
November 30, 2021 - 7 min read