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VA Foreclosure Guidelines In Qualifying For VA Home Loans

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VA Foreclosure Guidelines In Qualifying For VA Home Loans

This BLOG On VA Foreclosure Guidelines In Qualifying For VA Home Loans Was PUBLISHED On April 17th, 2019

VA Foreclosure Guidelines requires a two-year waiting period after a housing event to qualify for VA Loans.VA Foreclosure Guidelines is less strict than other loan programs.

  • A housing event is a foreclosure, deed in lieu of foreclosure, or short-sale
  • HUD, the parent of FHA, requires a three-year waiting period after a housing event
  • Fannie Mae and Freddie Mac have a four-year waiting period after a short sale or deed in lieu of foreclosure and a seven-year waiting period after a standard foreclosure
  • NON-QM Loans does not have any waiting period requirements after a housing event
  • However, non-qm loans do require a 10% to 20% down payment requirement

In this blog, we will discuss VA Foreclosure Guidelines and qualifying for VA Loans after a housing event.

VA Foreclosure Guidelines On Buying A Home After Housing Event

VA Foreclosure Guidelines mandates a waiting period after the foreclosure, deed in lieu of foreclosure, short sale to qualify for a VA Loan.

  • Unlike other loan programs, VA Foreclosure Guidelines makes it able for borrowers to qualify for a VA Loan just two years after a housing event
  • FHA and USDA require a three-year waiting period
  • Conventional loans require a four year waiting period after a deed in lieu of foreclosure and/or short sale and 7 years after a foreclosure

Whether you have defaulted on a VA Loan or other loan program, the waiting period to qualify for a VA Loan after a housing event is a two-year waiting period.

VA Home Loan Eligibility Requirements

VA Loans is the best owner-occupant home mortgage program in the United States.

  • Our government created and launched VA Loans through the U.S. Department of Veterans Affairs (The VA) to reward our active and retired members and eligible surviving spouses of our Armed Services
  • VA does not require any down payment
  • Eligible veterans with a valid Certificate of Eligibility (COE) are eligible to purchase a home with a VA Loan with 100% financing
  • There are no minimum credit score requirements or debt to income ratio caps on VA Loans
  • Loan Limits on VA Loans is capped at $484,350
  • Loan limits are higher on high-cost areas
  • The VA has lenient credit and income lending guidelines than other loan programs

The VA understands that veterans can have lower credit profile than their civilian counterparts due to being deployed or being transferred to other stations year after year. Gustan Cho Associates has no overlays on VA Loans.

Qualifying For A VA Loan After A FHA And/Or Conventional Loan Foreclosure

Homeowners who had a prior foreclosure on a non-VA Loan such as a conventional or FHA Loan, there is a two-year waiting period to qualify for a VA Loan.

  • Borrowers can qualify with their full VA entitlement on a new VA Loan with a prior foreclosure with a mortgage that was a conventional or FHA Loan
  • There is only a one-time entitlement on a VA Loan

So as long as the foreclosed loan was not a VA Loan, the borrower will have their full VA entitlement.

VA Foreclosure Guidelines In Getting A New VA Loan After A Prior VA Loan Foreclosure

Defaulting on a prior VA Loan may affect getting a new VA Loan after a foreclosure.

  • There is a two-year waiting period to qualify for a VA Loan after a foreclosure
  • However, if the prior foreclosure was on a VA Loan, borrowers may have limited VA entitlement on their new VA Loan
  • New home buyers need to determine how much VA Loan Entitlement they have left if they foreclosed on a prior VA Mortgage
  • Borrowers need entitlement every time they are purchasing a home with a VA Loan
  • Every time a borrower defaults on their VA Loan, they lose the VA entitlement they utilize in purchasing their home
  • They can regain their VA entitlement if they repay the VA in full
  • However, the chances are that the veteran did not use their full entitlement on their foreclosed VA Loan
  • Most borrowers will have enough VA entitlement to qualify for another VA Home Loan after a prior VA Loan foreclosure

One of our experienced loan officers can go over the veteran’s Certificate Of Eligibility (COE) to determine how much entitlement they have left and whether or not it is sufficient to qualify for another VA Loan.

Qualifying For A VA Loan After A Housing Event With A Direct Lender With No Overlays

Gustan Cho Associates at Loan Cabin Inc. is a nationally recognized 5-star direct lender with no overlays on VA Home Loans. If you are looking for an aggressive direct lender with no overlays, please contact us at 262-716-8151 or text us for faster response. Or email us at gcho@loancabin.com. We are available 7 days a week, evenings, weekends, and holidays.

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