In this article, we will cover and discuss VA  foreclosure guidelines in qualifying for VA loans. VA Foreclosure Guidelines require a two-year waiting period after a housing event to qualify for VA Loans.VA Foreclosure Guidelines are less strict than other loan programs. A housing event is a foreclosure, deed in lieu of foreclosure, or short-sale.

VA Foreclosure Guidelines Versus FHA Loans

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 do 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 make 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 are 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.

 VA Minimum Credit Score Requirements

There are no minimum credit score requirements or debt to income ratio caps on VA loans.  Loan Limits on VA loans are capped at $647,200. 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 a 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.

VA Entitlement

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 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 is licensed in multiple states with no lender overlays on VA Home Loans. If you are looking for mortgage consultant with no lender overlays, please contact us at Gustan Cho Associates at 800-900-8569 or text us for a faster response. Or email us at alex@gustancho.com. We are available 7 days a week, evenings, weekends, and holidays.