VA Home Mortgage With 500 FICO Lending Guidelines

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This BLOG On VA Home Mortgage With 500 FICO Lending Guidelines Was PUBLISHED On February 5th, 2019

VA Loans is the best owner-occupant residential mortgage program in the U.S.

  • However, borrowers need to be either active or retired members of the U.S. Military with a valid Certificate of Eligibility
  • Certificate of Eligibility is also referred to as COE
  • The U.S. Department of Veterans Affairs is the government agency that is in charge of the VA Home Mortgage Guarantee Programs
  • Lenders can offer 100% financing with interest rates lower than conventional loans to VA borrowers

This is due to the partial loan guarantee by the Department of Veterans Affairs. Gustan Cho Associates are direct lenders with no overlays on VA Mortgages.

Lender Overlays Versus Agency Mortgage Guidelines

Over 75% of our borrowers at Gustan Cho Associates are folks who come to us due to last-minute mortgage denial or stress during their mortgage process.

  • Gustan Cho Associates is a five-star national lender with no overlays on VA Loans
  • Overlays are lending requirements that are above and beyond those of VA Guidelines
  • For example, VA does not require a minimum credit score requirement
  • However, most lenders have minimum credit score requirements of 620 to 640
  • This minimum credit score requirement by lenders is called lender overlays
  • Gustan Cho Associates has no minimum credit score requirements

Borrowers can qualify for VA Home Mortgage with no credit score requirements at Gustan Cho Associates. 

Qualifying For VA Home Mortgage With 500 FICO

Many borrowers are often confused about the minimum credit scores required on VA Loans.

They often are surprised when they contact us that they can qualify for VA Home Loan With 500 FICO.

How Strict Is It To Qualify For VA Home Mortgage With 500 FICO

VA Loans are one of the easiest loan programs to qualify for.

  • VA Home Loans was created and launched in 1944 by the Department of Veterans Affairs to reward and help our men and women of the U.S. Armed Services to purchase homes after they got back from World War II
  • VA has helped many million soldiers buy and finance their home loans
  • Besides offering 100% financing, the Department of Veterans Affairs realized that soldiers did not have good credit while being deployed versus their civilian counterparts
  • It is difficult to pay your bills on time while being deployed to serve your country overseas
  • The agency created much lax underwriting guidelines than other loan programs
  • To qualify for VA Loans after foreclosure, short sale, deed in lieu of foreclosure has a two year waiting period versus FHA’s three year waiting period
  • VA does not have a minimum credit score requirement where FHA requires 580 credit scores
  • VA does not have a maximum debt to income ratio requirements when other loan programs do
  • Unfortunately, most lenders do not offer VA Home Mortgage With 500 FICO

The great news is that Gustan Cho Associates offers VA Home Mortgage With 500 FICO as long as borrowers can get an automated underwriting system approval.

Automated Underwriting System And Key Getting An AUS Approval

The Automated Underwriting System is a sophisticated automated system that renders a decision within seconds of the loan officer imputing the date of borrowers. Borrowers can qualify for VA Home Mortgage With 500 FICO but need an AUS Approval.

Automated Underwriting System will analyze the following prior to rendering its decision:

  • Credit Scores
  • Overall Payment History
  • Late payments 
  • Late payments in the past 12 months
  • Available credit on revolving credit accounts
  • Down payment, if any
  • Reserves if any
  • Residual Income
  • Credit inquiries

All the above factors are analyzed by AUS. If AUS determines borrowers meet all VA Guidelines, it will render an approve/eligible per automated underwriting system.

VA Home Mortgage With 500 FICO Process

The way our system at Gustan Cho Associates works is we just go off by automated underwriting system findings. We do not have any overlays so as long as borrowers get an approve/eligible per AUS and can meet the conditions, they are approved and we can close on the VA Home Mortgage With 500 FICO. When AUS renders its decision, it will list a set of conditions.

Example Of Conditions

Examples of conditions may be the following:

  • Verification of employment
  • Verification of funds
  • Verification of rent
  • Certificate of Eligibility
  • 2 years tax returns and W2s
  • And other documents

Borrowers who get a refer/eligible from the automated underwriting system, lenders can downgrade the file to manual underwriting. VA and FHA allow for manual underwriting.

Borrowers who need to qualify for VA Home Mortgage With 500 FICO, please contact us at Gustan Cho Associates at 262-716-8151 or text us for faster response. Or email us at gcho@gustancho.com. The Team at Gustan Cho Associates is available 7 days a week, evenings, weekends, and holidays.

This BLOG On VA Home Mortgage With 500 FICO Was Written By Gustan Cho National Managing Director at Gustan Cho Associates NMLS 1657322

2 Comments
  1. Mark Jones says

    Are you license in Texas?

    1. Gustan Cho, NMLS 873293 says

      Yes. We are licensed in Texas. Texas is one of our top states.

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