VA Loan During Chapter 13 Bankruptcy Qualification Requirements

This Article Is About VA Loan During Chapter 13 Bankruptcy Qualification Requirements:

Homebuyers can qualify for a VA loan during Chapter 13 Bankruptcy. Chapter 13 Bankruptcy does not have to be discharged. In this article, we will discuss the following:

  • Qualifying for a VA loan during Chapter 13 Bankruptcy.
  • Chapter 13 Bankruptcy does not have to be discharged.
  • Getting Trustee approval.
  • VA agency guidelines versus lender overlays.

Gustan Cho Associates is a VA lender with no lender overlays.

Get a custom VA mortgage quote now. 

Gustan Cho Associates Does Not Have Any Lender Overlays On VA Loans

VA loans are the best home mortgage program in the nation.

VA loans are the best home mortgage program in the nation. VA loans are only available to active and/or retired members of the U.S. Armed Services with a valid certificate of eligibility (COE),

Lenders offer 100% financing with no down payment required at lower rates than conventional loans due to the government guarantee, There are no mandatory mortgage insurance on VA loans,

The VA Funding Fee is a one time cost that can be rolled into the balance of the VA loan, The Veterans Administration has much lenient agency mortgage guidelines than other loan programs Veteran home buyers with a Certificate of Eligibility can qualify for VA Loan During Chapter 13, Bankruptcy one year into the Chapter 13 Repayment Plan.

In order to qualify for VA Loan During Chapter 13 Bankruptcy, the borrower will need to have the approval of the Chapter 13 Bankruptcy Trustee which is normally not a problem.

Types of Bankruptcies and VA Loans

There are two types of Bankruptcies available to consumers:

  • Chapter 7 Bankruptcy
  • Chapter 13 Bankruptcy

A Chapter 7 Bankruptcy is where a consumer has little to no income and is drowning in debt.

Most debts can be discharged under a Chapter 7 Bankruptcy. It takes 90 days to have the consumer discharged with a Chapter 7 Bankruptcy.

There is a two-year waiting period to qualify for a VA Loan after the discharged date of a Chapter 7 Bankruptcy. A Veteran borrower can qualify for VA Loan one year into a Chapter 13 Bankruptcy repayment plan.

The borrower needs to show proof of on-time payments to their creditors for the past 12 months. There is no waiting period to qualify for a VA Loan after a Chapter 13 Bankruptcy discharged date.

What Are The VA Qualification Requirements During Chapter 13 Bankruptcy Repayment Plan

Here are the general requirements on VA Qualifying For VA Loan During Chapter 13 Bankruptcy:

The borrower needs a valid COE,  Certificate of Eligibility. Veteran Borrower needs to have made timely payments with no 30 day late payments for the past 12 months to all creditors named in the Chapter 13 Bankruptcy. The borrower needs to get approval from their assigned Chapter 13 Bankruptcy Trustee.

The borrower needs at least a 580 Credit Score to qualify with Gustan Cho Associates. We do not have any lender overlays on VA Loans. 

Verification of Rent is only valid if the renter can provide 12 months of canceled checks paid to their landlord. Or bank statements reflecting outgoing transfers of the same amount of their rental payments to their landlord’s bank account.

If the renter rents from a registered property management company, then a VOR Form provided by the lender to the property manager. Can be completed by the property management manager can be used in lieu of the 12 monthly checks and/or 12 months of bank statements.

Gustan Cho Associates can waive the verification of rent for borrowers who have been living rent-free with family in order to save money for their home purchase and closing costs.

VA Loan Requirements

VA Loan Requirements

VA Loans is the best mortgage loan program available to mortgage borrowers. However, not everyone qualifies for VA Loans. Here are the qualification requirements for VA Loans and a little about VA Loans:

VA Loans are only for Veterans who have served in the U.S. Military with a Certificate of Eligibility. VA Loans do not require the borrower to put any money down on a home purchase. The team at Gustan Cho Associates are experts in originating and funding VA Loans With Bad Credit and VA Loans With Low Credit Scores with no VA Lender Overlays.

Mortgage insurance premium not required on VA Loans. One-time upfront funding fee. Funding fees can be rolled into the VA loan balance.

VA does not have a credit score requirement. It is up to individual lenders to have lender overlays on credit scores.

We recommend a minimum of 580 Credit Score on VA Loans in order for the best chances of getting an approve/eligible per Automated Underwriting System. However, Gustan Cho Associates have closed VA loans with credit scores in the low 500 FICO with an approve/eligible per AUS.

Gustan Cho Associates has no VA Lender Overlays. VA Loans has very low mortgage rates for borrowers with higher credit scores. Mortgage rates on high credit score borrowers are lower than conventional rates. VA Lenders can offer the lowest mortgage rates on VA Loans even with 100% financing.

The reason why VA loans are lower for higher credit score borrowers is that the VA Loan is guaranteed by the United States Department of Veteran Affairs.

Why Do Lenders Require Waiting Periods After Chapter 13 Bankruptcy Discharge Date On VA Loans?

Here are the requirements to qualify for VA Loan During Chapter 13 Bankruptcy Repayment Period And After Chapter 13 Bankruptcy Discharge Date:

A Veteran borrower with a COE can qualify for a VA Loan During Chapter 13 Bankruptcy. Need to be one year into the Chapter 13 Bankruptcy Repayment Plan with the approval of the Chapter 13 Bankruptcy Trustee and verification of rent.

Timely payments in the past 12 months. We recommend a minimum 580 Credit Score and have no overlays on VA Loans.

We do not have any debt-to-income ratio requirement on VA Loans. Just go off Automated Underwriting System approval. As long as the Veteran borrower has plenty of VA Residual Income, we can get an approve/eligible per AUS FINDINGS with debt to income ratios as high as 60% DTI.

There is no waiting period to qualify for a VA Loan after a Chapter 13 Bankruptcy discharged date.

The reason why some lenders disqualify Veteran borrowers for VA Loans during a Chapter 13 Bankruptcy Repayment Period is NOT BECAUSE OF VA GUIDELINES, BUT because of their own lender overlays on VA Loans. Lender Overlays are the individual lender’s own lending requirements on top of the VA Guidelines

Each mortgage lender can have higher lending standards than those of the U.S Department of Veteran Affairs and this is what you call lender overlays.

Veteran Home Buyers who need to qualify for a VA Loan During Chapter 13 Bankruptcy Repayment Plan or after a Chapter 13 Bankruptcy discharge with no waiting period, please contact us at Gustan Cho Associates at 262-716-8151 or text us for a faster response.

You can also email us at [email protected] The team at Gustan Cho Associates is available 7 days a week, evenings, weekends, and holidays.

See if you qualify for a home loan in just 5 minutes.

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