VA Home Loan Requirements

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Gustan Cho Associates has crafted an exhaustive guide on VA home loan requirements specifically designed for our potential clients and viewers. This detailed guide will explore every aspect of VA home loan requirements tailored for a variety of situations, including first-time homebuyers, individuals with poor credit, those with a high debt-to-income ratio, and homebuyers who have experienced bankruptcy, foreclosure, or late payments.

Key advantages of VA loans highlighted in this guide are their lack of down payment requirements, absence of a maximum loan limit, no minimum credit score necessary, and no requirement for mortgage insurance, making them an exceptionally accessible option for qualified borrowers.

The VA home loan requirements guide is comprehensive and unparalleled in its scope. We will also address our client’s most frequently asked questions about VA home loan requirements and outline the process for securing VA loans even with bad credit. Further sections will discuss the VA loan requirements for active and retired U.S. Military members who hold a Certificate of Eligibility, ensuring comprehensive coverage of all necessary information for applicants.

What Are VA Loans?

In 1944, U.S. President Franklin Delano Roosevelt endorsed and signed the Servicemen Readjustment Act, also known as the GI Bill of Rights. This legislation was designed to assist U.S. veterans and their families in achieving the dream of homeownership. Through VA loans—federally guaranteed home loans that do not require a down payment as long as applicants meet the VA home loan requirements—veterans and their families can turn the dream of owning a home into reality. Speak With Our Loan Officer for Mortgage Loans

What Are The Minimum VA Home Loan Requirements

One of the most significant benefits the government provides to military veterans is the provision of VA Loans, available to those who meet the VA Home Loan Requirements. For many years, the U.S. Department of Veteran Affairs has been offering these loans with 100% financing, underscoring its commitment to veterans.

VA loans are widely regarded as the premier loan program in the United States today.

Eligibility for this outstanding loan program is exclusively for veterans possessing a Certificate of Eligibility (COE). The Department of Veteran Affairs sets the criteria for VA Home Loans, determining eligibility based on several factors. These include whether the service was during wartime or peacetime and the duration of the veteran’s service, which are crucial in issuing a COE.

What Are The Requirements To Get a VA Loan

Thank you, veterans, for your service. We deeply appreciate your dedication to our safety. Let us assist you in obtaining a VA loan for your home purchase. We offer no lender overlays and flexible VA Home Loan Requirements to make the process accessible.

VA loans, while highly beneficial, may only suit some individuals. These loans were established by the U.S. government as a gesture of gratitude to our society’s members for their service, both in peacetime and wartime. VA Home Loan Requirements are known to be more lenient than other mortgage loan programs.

Rest assured, we will continually update this guide on VA Home Loan Requirements to reflect any changes as they occur.

Who Makes The VA Home Loan Requirements?

A common question is about who establishes the VA home loan requirements. This is an excellent query. The Veterans Administration and individual mortgage lenders set the VA home loan requirements. The Department of Veterans Affairs, a key government body, administers and defines VA home loan eligibility guidelines for active duty service members, retired veterans, and the spouses of deceased eligible members.

It is highly advantageous for veterans to read this guide on their first encounter to understand their VA eligibility fully. Click here to qualify for VA Loan 

VA Home Loan Requirements During Service Periods

Eligibility requirements for obtaining a VA loan during various wartime service periods are outlined as follows:

• Vietnam Era: The designated wartime period spans from August 5, 1964, to May 7, 1975.
• Persian Gulf, Afghanistan, and Iraq: The service period extends from August 2, 1990, to the present.

Individuals need to have completed a minimum of 90 days of active duty service during certain timeframes to qualify for a VA home loan.

How Do I Know If I Am Eligible For A VA Loan?

VA Home Loan Requirements For Eligibility During Peacetime Periods Of Services:

• Period of peacetime services between 05/08.1975 to 08/01/1990
• The veteran must have completed at least 181 days of continuous active duty military service.
• Military reserve members and members of the National Guard must have completed at least six years as members of the Selected Reserves.
• Spouses of a prisoner of war or missing-in-action veteran is eligible as long as they have been a prisoner of war or missing in action for at least 90 days.

What Is The Lowest Credit Score I Can Have To Buy a House With a VA Loan?

Mortgage lenders may impose additional VA home loan requirements beyond the standard agency guidelines, known as lender overlays. Suppose your application for a VA loan is denied. In that case, it’s crucial to determine whether the rejection was because you still need to meet the official VA agency guidelines or due to the lender’s specific overlays.

We will comprehensively detail all the VA home loan requirements to ensure that, should a lender deny your loan, you can identify whether the denial was based on failing to meet the VA’s standards or the lender’s additional requirements.

VA Loan Eligibility Requirements

Gustan Cho Associates strictly adheres to the VA’s basic VA Home Loan Requirements without imposing additional lender overlays. Lender overlays are extra criteria that some mortgage lenders add to what the Veterans Administration requires. These can complicate the approval process for borrowers needing to meet these heightened standards.

Not all lenders who provide VA home loans operate under the same conditions. While some may enforce these additional requirements, Gustan Cho Associates offers VA mortgage loans based solely on the fundamental VA Home Loan Requirements. This approach ensures that if you don’t qualify with one lender due to their overlays, you might still get approved by Gustan Cho Associates, who do not impose such overlays.

Understanding these minimum VA Home Loan Requirements, as determined by the Veterans Administration, is crucial for veterans navigating the loan process. This knowledge can make a difference in successfully securing a VA loan. Click here to check for eligibility for VA Loan 

What Are The Minimum VA Agency Guidelines from the Veterans Administration

We have detailed the principal VA home loan requirements set forth by the Veterans Administration for veterans to consider while applying for a VA home loan. It’s important to remember that if you satisfy the VA home loan requirements outlined below, you will qualify for a VA home loan through a mortgage lender that does not impose additional lender overlays. VA loans are accessible to eligible homebuyers who possess a Certificate of Eligibility.

What is the Minimum Credit Score for a VA Loan?

VA home loan requirements do not include a minimum credit score if an approved/eligible decision is returned by the automated underwriting system (AUS). This allows homebuyers to be eligible for VA loans with credit scores as low as 500 FICO, either through AUS or manual underwriting.

Achieving approval from the automated underwriting system hinges on having maintained timely payments on all monthly obligations over the past 12 months. Suppose homebuyers do not receive an approve/eligible decision but are designated refer/eligible by the AUS. In that case, they may still qualify through manual underwriting, for which specific guidelines are provided.

What Is Manual Underwriting on VA Home Loans?

VA and FHA loans are the two primary government-backed loan options that permit manual underwriting. This type of underwriting occurs when a borrower does not receive an approve/eligible decision from an automated underwriting system (AUS) but instead receives a refer/eligible outcome. In such cases, a mortgage underwriter will manually assess the borrower’s application.

To qualify for manual underwriting under VA home loan requirements, a borrower must have consistently made all their monthly payments on time for the past 24 months. One key distinction between manual and automated underwriting is the imposition of a capped debt-to-income ratio in manual underwriting, allowing underwriters significant discretion.

Gustan Cho Associates has successfully processed manual underwriting files with debt-to-income ratios up to 64% DTI, provided strong compensating factors exist. Furthermore, for manual underwriting purposes, Gustan Cho Associates requires timely payments for at least the past 12 months.

Can I Get Approved For VA Loans With Collection Accounts?

Veterans can qualify for VA home loans with collections, charged-off accounts, and derogatory credit as long as they have been timely in the past 12 months on all of their monthly debt payments. Unpaid collections and charge-off accounts do not have to be paid on VA loans. As long as the date of last activity on collections and charge-off accounts is older than 12 months, you will be eligible to qualify for VA loans.

VA Loan Debt-To-Income Ratio Guidelines

There is no maximum debt-to-income ratio cap on VA loans if you get automated approval. It is not uncommon for our typical client to have a 65% AUS approval. The key to getting an AUS approval with high debt to income ratio, the borrower needs to meet the residual income test.

VA does not mandate a maximum debt to income ratio with an approve/eligible per automated underwriting system (AUS).

Veterans can get an approve/eligible with credit scores down to 500 FICO and a debt-to-income ratio over 60% DTI if they have strong residual income. Most lenders will tell you a front-end and back-end debt-to-income ratio requirement. Most of the caps I have seen are at 31% front-end and 43% back-end DTI. Gustan Cho Associates has no lender overlays  VA loans with credit, DTI, FICO, or derogatory tradelines.

Can You Qualify For a VA Loan With Gaps In Employment in The Past Two Years?

Two years of employment history but gaps in employment allowed. There is no maximum loan limit on VA loans. Primary residentially zoned one to four-unit properties is eligible for VA home loans.

What Are The Steps To Applying For a VA Home Loan?

The first step of qualifying and getting pre-approval on a VA loan is to get a certificate of eligibility (COE).  To receive this certificate, the borrower must file VA Form 26-1880, Request for Determination of Eligibility and Available Loan Guaranty Entitlement. Spouses of Veterans and service members who have died while on duty in the service or have died because of a disability due to the result of serving in the armed services may also be eligible by the Department of Veteran Affairs. You then have to choose a lender.

How Can You Receive a Certificate of Eligibility From the Veterans Administration?

To receive a certificate of eligibility from the United States Department of Veteran Affairs, the VA Loan borrower must have filed a VA Form 26-1880 for Determination of Eligibility and Available Loan Guaranty Entitlement. First, a borrower must have a certificate of eligibility from the VA to obtain a loan.

Gustan Cho Associates has a reputation for helping borrowers who could not qualify at other lenders. We say YES when other lenders say NO on VA loans.

The team at Gustan Cho Associates can help borrowers obtain the COE and help you start the homebuying and mortgage process. Gustan Cho Associates are experts on VA loans. Not all mortgage lenders have the same lending requirements on VA loans. In the paragraph below, we will explain why one lender has a higher lending requirement than another. Gustan Cho Associates has a national reputation for being able to approve VA loans with bad credit when others can’t.

VA Home Loans For Active Duty Military Personnel

Veterans who served on active duty in the following branches of the U.S. Military with a military discharge other than dishonorable discharge are eligible for VA loans:

• U.S. Army
• U.S. Air Force
• U.S. Navy,
• The United States Marine Corps
• United States Coast Guard

Soldiers currently in the military and on active duty are eligible to qualify for VA Loans if they have served for at least 90 or more days without any gaps in employment. For veterans who did not have wartime service during the Persian Gulf Era, at least 181 days of active duty service is necessary to qualify for VA loans. Click here to qualify for VA Loan  with us

The Following Are The Time of Service VA Home Loans

Here are the VA Eligibility Requirements:

• Served 90 or more days during wartime
• The veteran has served at least 181 or more continuous days during peacetime

VA Home Loans on Two-Year Rule

In this section, we will cover VA Home Loans on the TWO-YEAR RULE: If the veteran has enlisted or began military service after 7 September 1980 or was an officer of the U.S. Military and started serving our country on 16 October 1981. Then, the following conditions need to be met: The veteran must have served at least 24 months or more, or the veteran’s service serving on active duty cannot be less than 90 continuous days during wartime or less than 181 continuous days during peacetime.

Serving During Wartime Versus Peacetime

The Department of Veteran Affairs differentiates service during wartime and peacetime when determining the VA Certificate of Eligibility issuance. VA Home Loans on service during wartime versus peacetime are as follows:

During World War II

Wartime is from September 16, 1940, through July 25, 1947, and during peacetime from July 26, 1947, to June 26, 1950.

During the Korean War Period

The wartime timeline is from June 27, 1950, to January 31, 1955. Peacetime is from February 1, 1955, to August 4, 1964.

Vietnam War Period

The wartime service period is from August 5, 1964, until May 7, 1975. Vietnam War Era Peacetime service is from May 8, 1975, until August 1, 1990.

Persian Gulf War Conflict Period

The wartime service period is considered from August 2, 1990, until ++++( Not determined yet ).

Can I Get a VA Loan With Bad Credit?

Eligible veterans with a certificate of eligibility (COE) can qualify for a VA home loan with bad credit. You do not have to pay outstanding collection account balances to qualify for a VA loan. VA only cares that you have been timely on your payments for the past 12 months. Eligible retired or active members and eligible surviving spouses of veterans of the U.S. Armed Services can qualify for VA loan programs at Gustan Cho Associates with zero lender overlays.

What Are The Minimum Requirements For a VA Home Loan?

Not all lenders have the same lending requirements on VA loans due to lender overlays. Gustan Cho Associates has zero lender overlays on VA loans. Over 75% of our clients could not qualify at other lenders due to overlays, last-minute mortgage denial, or stress during the mortgage process. Most borrowers get qualified and close at Gustan Cho Associates with zero stress.

Best VA Lenders With No Overlays

Gustan Cho Associates are mortgage advisors licensed in 48 states, including Washington DC and Puerto Rico (Not licensed yet in MA and NY). As with other government loan programs like FHA and USDA, there are mortgage lending guidelines with VA loans concerning minimum credit score requirements and debt-to-income ratio requirements. We are a no overlay VA mortgage lender. As long as you get an approve/eligible per the Automated Underwriting System, you will close on your VA loan.

Who Qualifies For a VA Loan?

Not all members of the U.S. Military can qualify for a VA loan. You need a certificate of eligibility (COE) to be eligible for VA loans. Active or retired members of the U.S. Military with a certificate of eligibility (COE) will qualify for a VA loan.

How Do Veterans Become Eligible For VA Loans

In this section, we will cover the eligibility guidelines for VA loans. The veteran must have served 181 days of active service during peacetime. Veterans must have served 90 consecutive days of active service during wartime. Or, the veteran must serve more than six years of service with the National Guard or Reserves or served at least 90 days under Title 32, with at least 30 consecutive days. Just because you have served does not automatically entitle you to VA home loan benefits.

How Hard Is It To Get a VA Loan?

One of the frequently asked questions at Gustan Cho Associates is how hard is it to get a VA loan? For borrowers who are eligible and have VA entitlement, the process of getting a VA home loan is very simple.

Eligible borrowers do not have to come up with any down payment, no minimum credit score requirements, and no maximum debt-to-income ratio caps.

There is no maximum loan limit on VA loans. Another great benefit on VA mortgage loans is there is no mortgage insurance required. The team at Gustan Cho Associates is available 7 days a week, late evenings, on weekends, and on holidays. Licensed in most of the 50 states. Over 75% of our borrowers could not qualify at other lenders due to lender overlays, stress during the mortgage process, or last-minute loan denial.

Competitive rates: We have lending partnerships with over 170 wholesale lenders. No lender overlays. Expertise in being able to do VA loans other lenders cannot do.

Can You Get Denied After Being Pre-Approved For a VA Loan?

Most mortgage lenders have their own VA home loan requirements, or overlays, they create and require. VA home loans are marketed, originated, and funded by private mortgage lenders who have their own lender overlays. What this means is they have their own credit score, debt-to-income ratio, and other credit/income lender overlays they require.

There are lenders like Gustan Cho Associates with no lender overlays. We have a business model where we have wholesale lenders who just go off VA agency mortgage guidelines and has zero overlays on VA loans. Click here to get pre-approvable for VA Loan 

Can You Get Approved For a VA Loan After Being Denied?

There are many cases where some borrowers get approved for a VA home loan with a particular lender while others get denied even though they meet the minimum VA home loan requirements of the VA. Many people who are eligible for a VA home loan and meet all of the VA home loan requirements get denied by many lenders who have lender overlays. This is often the case when the borrower has low credit scores, prior bad credit, collections, charged-off accounts, high DTI, and other credit/income issues.

How Can I Find a Lender To Approve Me on a VA Loan After Being Denied?

Many veterans assume all VA home loan requirements are the same among mortgage lenders on VA loans. However, this is not true. There are two different types of mortgage guidelines on VA loans. The first and foremost, all mortgage lenders need to make sure their borrowers meet the minimum VA agency guidelines of the U.S. Veterans Administration (the VA). The second type of guidelines on VA loans are the internal individual VA home loan requirements by the lender called lender overlays.

Best Mortgage Lenders For VA Loans With No Overlays

Over 80% of our clients at Gustan Cho Associates are borrowers who could not qualify at other lenders. There are no minimum credit score requirements. Scores down to 500 FICO. There are no maximum debt-to-income ratio caps with an AUS approval. Debt-to-income ratio of 65% approved per AUS.

Gustan Cho Associates are experts in Manual Underwriting of VA loans. There is no down payment requirement on a home purchase. 100% financing on owner-occupant one to four-unit homes. There is no mortgage insurance premium required. There is no maximum loan limit on VA loans. Read More on Getting Mortgage Approval After Being Denied

What Should I Look For In A VA Lender?

Mortgage lenders can have lenders overlays on VA home loans. Lender overlays are lending requirements that are higher than the minimum agency VA guidelines. Make sure you do your research on the mortgage lender’s minimum VA Home Loans. At Gustan Cho Associates, we have no lender overlays. We just go by the VA agency guidelines. Most of our VA home loans close in 30 days or less. 

Best Mortgage Lenders For VA Loans After Being Denied

Over 75% of our borrowers are folks who could not qualify at other lenders due to last-minute loan denial, stress during the mortgage process, and not being able to get a hold of their loan officers. We have a national reputation for being able to do loans other lenders cannot do. Gustan Cho Associates is referred to as a One-Stop Mortgage Shop due to having a network of over 190 wholesale mortgage lenders.

The team at Gustan Cho Associates strives to get the best of the best service, loan program, rates, and net tangible benefits for our borrowers. We are grateful to our clients and preferred realtor partners for our expanding growth and success. Thank you for your confidence, faith, and trust in Gustan Cho Associates in having us as your mortgage professional for life. The team at Gustan Cho Associates will not let you down.

Read More on Getting Mortgage Approved After Being Denied

Can I Qualify For a VA Loan After Bankruptcy?

Yes, you can qualify for a VA loan after bankruptcy. There are two types of bankruptcy: Chapter 7 and Chapter 13 Bankruptcy. The VA guidelines after Chapter 7 bankruptcy are different from Chapter 13 Bankruptcy. Chapter 7 Bankruptcy is very straightforward, where the borrower needs to wait the mandatory two years after the discharge date.

You can qualify for a VA loan during and after Chapter 13 Bankruptcy. We will cover and discuss this topic in more detail. We will cover both types of VA home loan requirements after bankruptcy. Borrowers cannot have late payments during or after bankruptcy.

VA Home Loan Requirements After Chapter 7 Bankruptcy

Homebuyers can qualify for a VA loan after Chapter 7 Bankruptcy after a two-year waiting period. The waiting period is two years from the discharge date. You need to have rebuilt and re-established credit after the discharge date. No late payments after the discharge date. The bankruptcy does not affect your mortgage rates on your VA loan. Mortgage rates on VA loans are mainly based on credit scores. This is why it is very important to start rebuilding your credit when you get discharged from Chapter 7 Bankruptcy.

VA Loan Guidelines During Chapter 13 Bankruptcy

Homebuyers can qualify for VA loans during the Chapter 13 Bankruptcy repayment period one year after being in the plan. The Chapter 13 Bankruptcy does not need to be discharged to be eligible for a VA loan. You need to have made twelve timely payments to your Chapter 13 debts. The bankruptcy trustee needs to approve the mortgage. It needs to be a manual underwrite. Gustan Cho Associates are experts in helping veterans get approved and close on VA loans during the Chapter 13 Bankruptcy repayment plan.

VA Home Loan Requirements After Chapter 13 Bankruptcy

No waiting period is required after the Chapter 13 Bankruptcy discharge date to qualify for VA home loans. If the discharge date of the Chapter 13 Bankruptcy is not at least two years old, the file needs to be a manual underwrite. We will cover manual underwriting guidelines on VA loans later in this guide. Verification of rent is required on manual underwrites. Qualify for VA Loan after Chapter 13 Bankruptcy 

Difference Between Automated and Manual Underwriting on VA Loans

The only difference between manual and automated underwriting system (AUS) findings approval files is the debt-to-income ratio on manual underwriting is limited. The front-end and back-end debt-to-income ratio on manual underwriting is based on the number of compensating factors the borrower has.

Manual Underwriting Guidelines on VA Loans

VA and FHA loans are the only two mortgage loan programs that allow manual underwriting. Manual underwriting is when a human mortgage underwriter scrutinizes the file more carefully than AUS-approved files. The debt-to-income ratio on manual underwriting depends on the number of compensating factors. The front-end DTI is 31%, and the back-end debt-to-income ratio is 43% with zero compensating factor. With one compensating factor, the front-end DTI is 37%, and the back-end DTI is 47%. With two compensating factors, the front-end DTI is 40%, and the back-end DTI is 50%.

Do All Mortgage Lenders Have The Same Rates on VA Loans?

No. Not all mortgage lenders have the same mortgage rates on VA loans. It is wise to shop for the best rates and terms on VA loans with several lenders and compare the rates, terms, and closing costs. Eligible retired or active members and eligible surviving spouses of veterans of the U.S. Armed Services can qualify for VA loan programs at Gustan Cho Associates with zero lender overlays. The United States Department of Veteran Affairs, the VA, backs residential owner-occupant home purchase mortgage loans through private lenders.

What Type of Property Can I Buy With a VA Home Loan?

Eligible members can purchase a one to four-unit single-family home. There is no maximum loan limit on VA loans. As long as the property purchase price is appraised and the borrower meets the VA loan guidelines, the borrower can purchase any property without concerns about VA loan limit caps.

However, not everyone qualifies for VA mortgages. Only United States Armed Forces members with a valid Certificate of Eligibility (COE) are eligible for VA home loans. United States Armed Services members need to meet the eligibility VA loan guidelines and have been awarded a Certificate of Eligibility to qualify for a VA loan.

How Much Money Do I Need To Buy a House With a VA Loan?

An eligible homebuyer can qualify for a VA loan with zero down payment. VA loan-approved financial institutions offer 100% financing. There is no annual homeowners insurance premium on VA loans.  Veterans who qualify for VA loans can purchase a home with no money down. Lenders will finance qualified borrowers 100% financing at competitive rates.

To qualify for a VA loan, the home buyer needs to have been honorably discharged from a division of the United States Armed Services and have a certificate of eligibility.

One of the most frequently asked questions from first-time homebuyers who are using their VA loans for the first time is how long does VA loan approval take. Remember not all VA lenders have the same VA Home Loans. All mortgage lenders need to meet the minimum agency  VA home loans.

What Is a Good Credit Score To Buy a House With a VA Loan?

There is no minimum credit score requirements to qualify for a VA loan per VA agency guidelines. However, it is highly recommended to boost and/or maximize your credit scores as high as possible. High credit scores mean lower rates on VA loans. The borrower’s credit scores is the biggest determinant on VA loans. Gustan Cho Associates have closed VA loans with credit scores down to 500 FICO.

How Much Is The VA Funding Fee?

In general, most veteran borrowers pay 2.3% VA funding fee. However, the VA funding fee varies between 0.5% to 3.6% of the VA loan amount, depending whether the borrower have used their VA entitlement before on a prior VA loan and/or if they are paying more than a 5% down payment on their home purchase.

Use Our VA DTI Mortgage Calculator With VA Funding Fee Calculations.

VA loans have a one time VA funding fee on all VA loans similar to the FHA one-time upfront mortgage insurance premium. The VA funding fee goes to the Department of Veterans Affairs (The VA) to support and fund VA loans. The VA funding fee depends on the individual veteran and their entitlement. 100% disabled veterans are exempt from paying the VA funding.
More on VA Funding Fee

How to Calculate VA Entitlement?

Calculating your VA entitlement involves understanding a few key aspects of the VA loan program. Here’s how you can determine your available VA entitlement:

Understand Basic and Bonus Entitlement

• Basic Entitlement: Every eligible veteran receives a basic entitlement of $36,000. Lenders typically allow a loan up to four times this amount ($144,000) without a down payment.
• Bonus Entitlement: Also known as the secondary entitlement, it applies in higher-cost counties and for loans exceeding $144,000. The VA guarantees up to 25% of the county loan limit minus any used entitlement.

County Loan Limits

• Check the VA county loan limits for the year you buy the home. This will determine the maximum amount to be financed without a down payment in your area.

Calculate Remaining Entitlement

• Suppose you’ve used your VA loan benefit before. In that case, you’ll need to subtract any previously used entitlement from your total available entitlement. You can find your used entitlement on your Certificate of Eligibility (COE) or by asking your VA lender to pull it.

• Total Entitlement: In most areas, veterans and active-duty service members have a total entitlement of around $144,000 (basic) plus an additional sum that brings the total to 25% of the county loan limit.

Example of Entitlement Calculation

Assume a county loan limit of $548,250 (common for many counties in 2021):

• Total Entitlement: 25% of $548,250 is $137,062.50.
• Your full entitlement is available if this is your first loan use.
• If you’ve previously used $50,000 of entitlement, you have $137,062.50 – $50,000 = $87,062.50 remaining.

Using Remaining Entitlement for Another Loan

• You can use the remaining entitlement for another VA loan, but remember that the minimum loan amount for which VA will guarantee 25% is $144,000 (i.e., you must have at least $36,000 entitlement available).

Get Your Certificate of Eligibility (COE)

• To confirm your entitlement amount, obtain your COE through the VA’s eBenefits portal or request assistance from a VA-approved lender.

When considering another VA loan or if you suspect your entitlement might be tied up in a previous property, it’s a good idea to consult a VA loan specialist who can help assess your situation.

Manual Underwriting is when the Automated Underwriting System does not render an AUS approve/eligible and is a refer/eligible finding. Refer/eligible means the borrower can be eligible but wants to have a human underwriter manually underwrite the loan. There is no difference between AUS versus Manual Underwriting except for a restriction on the debt-to-income ratio.

Mortgage Rates on VA Loans on Manual Underwriting

Not all lenders will do manual underwriting. Gustan Cho Associates are experts on manual underwrites on VA mortgage loans for those who cannot get automated approval.  There are instances where an approve/eligible per automated underwriting system approved VA loan can get downgraded to a manual underwrite.

VA home loans have one of the lowest mortgage rates of any other mortgage loan program.

Zero down payment and no mortgage insurance premium are two of the greatest benefits why veterans should take advantage of VA loans if they have a Certificate of Eligibility. There are no minimum credit score requirements on VA home loans. The automated underwriting system determines the debt-to-income ratio.

Can I Buy a House With a VA Loan With Poor Credit?

Mortgage loans guaranteed by the Veterans Administration are originated and funded by private mortgage lenders such as banks and mortgage companies that originate and fund owner-occupant home loans.  VA mortgage loans are a great program for veterans serving in the U.S. Army,  U.S. Navy, U.S. Air Force, United States Marine Corps, and United States Coast Guard. Each branch of service has its own eligibility benefits and is determined by the type of service, the longevity of service, and the character of the service. The VA has created lenient guidelines. Buy a House with VA Loan with Poor Credit

How Do I Get Pre-Approved For a VA Loan?

Here are the basic VA agency mortgage guidelines:

• There are no minimum credit score requirements on VA mortgage loan programs
• There are no maximum debt-to-income ratio caps as long as the borrower gets an approve/eligible per automated underwriting system (AUS)
• There is no down payment requirement on a home purchase
• 100% financing on owner-occupant one to four-unit homes
• There is no mortgage insurance premium required on VA loans
• There is no maximum loan limit on VA mortgages

For more information about VA loan mortgage loans, please get in touch with us at Gustan Cho Associates at 800-900-8569 or text us for a faster response. Or email us at alex@gustancho.com. The team at Gustan Cho Associates is available seven days a week, on evenings, weekends, and holidays.

Other VA Home Loan Requirements For VA COE

Just because a soldier served in the U.S. Military does not mean they automatically qualify for a VA home loan. VA home loans with regards to being eligible for VA loans. Veterans discharged due to hardship or service-related disability can qualify for VA loans. Veterans who were discharged from the military for the convenience of the federal government can qualify if they have completed a minimum of 20 months of a 24-month enlistment agreement.

See If You Meet The VA Home Loan Requirements

The veteran must have served no less than 90 days during wartime and 181 continuous days during peacetime due to disability caused by serving in the armed services. Veterans discharged from active duty due to medical conditions, whether to connect or not connected with their service, can qualify for VA Loans. Veterans who received an involuntary discharge by any branch of the armed services from active duty due to the government’s discretion to reduce military personnel or due to the following:

• mental
• psychological
• or physical condition that would interfere with their service can qualify for VA loans as long as their discharge was not related to improper conduct

Unmarried spouses of veterans who are deceased while on active duty or died due to service-related disabilities can qualify. Unmarried spouses of veterans who are missing in action or prisoners of war can qualify for VA loans.

VA Home Loan Requirements For Veterans of Selected Reserves

Members of the Selected Reserves are those who are compensated and paid for training and serving on the reserves. These members are on the Selected Reserve and are called when the government needs additional troops to safeguard our country.

How Many Years of Service in the Reserves is Required To Be Eligible for VA Loans

Members of the Selective Reserves who would not qualify for VA loans can qualify if they have completed six years of service in the Selective Reserves without being called to active duty if they meet the following conditions:

• They have served and got an honorable discharge
• If they were on the retired list
• Were transferred to a division of the Ready Reserve or Standby Reserve
• Is continuously serving in the Selective Reserve unit
• The six years of service need not be continuous to qualify for VA loan programs or need not be in the same National Guard or Reserve division.
• Cannot combine active and reserve service to meet the six-year rule

VA Home Loan Requirements Versus Other Loan Programs

VA Guidelines to qualify for VA Loans are the following:

• No debt-to-income ratio requirements
• No credit score requirements
• 2-year waiting period after Chapter 7 Bankruptcy
• 2-year waiting period after Short Sale, Deed-in-Lieu of Foreclosure,or Standard Foreclosure
• Gustan Cho Associates has no lender overlays on VA loans

What Will Make a House Fail VA Inspection?

A VA (Veteran Affairs) loan inspection, often part of the VA appraisal process, aims to ensure that a home meets specific safety, security, and structural integrity standards before a VA loan is approved. Here are common reasons a house might fail a VA inspection:

1. Structural Issues: Major structural problems, such as foundation damage, significant roof deterioration, or termite damage, can cause a home to fail.
2. Safety Hazards: Exposed wiring, non-functioning heating and cooling systems, peeling paint in homes built before 1978 (potential lead paint hazard), and other safety issues could be red flags.
3. Poor Overall Condition: Excessively dirty, cluttered, or disrepair homes may also fail. This includes broken windows, holes in the floor, and severe water damage.
4. Roof Condition: Roofs near the end of their lifespan or with significant damage can be a concern. The VA typically requires that the roof have a remaining useful life of at least three years.
5. Plumbing and Electrical Systems: Issues such as outdated electrical systems, faulty plumbing, or heating systems that do not function properly can lead to a failed inspection.
6. Water Damage and Mold: Evidence of water damage, flooding history, or mold can be serious enough for the property to fail the appraisal.
7. Access and Egress: The home must have safe and adequate pedestrian and vehicular access. Blocked or unsafe entrances and exits can be problematic.
8. Pest Infestation: Active infestations, especially termites or other wood-destroying insects, must be remediated before the VA loan can be approved.

The VA appraisal is less detailed than a home inspection and primarily focuses on the property’s safety and habitability. Potential buyers should also conduct a private home inspection to uncover any hidden issues.

For veterans needing a lender with no VA lender overlay, contact us at Gustan Cho Associates at 800-900-8569 or text us for a faster response. Or email us at gcho@gustancho.com. The team at Gustan Cho Associates is available 7 days a week, on evenings, weekends, and holidays. The team at Gustan Cho Associates is available 7 days a week, on evenings, weekends, and holidays.

Frequently Asked Questions About VA Home Loan Requirements For 2024

• What are VA Loans? VA Loans have been instrumental in helping United States veterans, active duty members, and eligible family members achieve the dream of homeownership since their introduction under the GI Bill of Rights in 1944. The advantages of VA Loans include lenient lending guidelines, no requirements for mortgage insurance, and no down payment obligations.
• Who is eligible for VA Loans? Eligibility for VA Loans is primarily determined by service duration and nature. To qualify for certain VA benefits, veterans must have served at least 90 continuous days during wartime or 181 days during peacetime. Reserve members and National Guard members need at least six years of service. Spouses of service members who died in the line of duty or from service-related incidents may also be eligible.
• What are the credit and income requirements for a VA Loan? VA Loans can be approved with a wide range of credit profiles, as there is no set minimum credit score requirement. However, lenders look for a stable income and a satisfactory debt-to-income ratio, typically approved up to 65% if compensating factors are strong.
• Can I obtain a VA Loan with a previous bankruptcy or foreclosure? After experiencing bankruptcy or foreclosure, veterans may still be able to qualify for a VA Loan. After a Chapter 7 bankruptcy discharge, a two-year waiting period is required. However, following the discharge of a Chapter 13 bankruptcy, there is no waiting period provided that the borrower has made timely payments during the bankruptcy period.
• What property types can I purchase with a VA Loan? Eligible borrowers can use a VA Loan to purchase a single-family home, a condo in a VA-approved project, or multi-unit properties, provided the veteran intends to occupy one of the units.
• How do I apply for a VA Loan? To apply for a VA loan, you need a Certificate of Eligibility (COE) from the VA. You can get it online, through your lender, or by sending in a form. After obtaining your COE, a lender approved by the VA will evaluate your credit history, income, and other relevant factors to ascertain whether you meet the loan requirements.
• Are there any costs associated with VA Loans? VA loans benefit from not mandating a down payment or mortgage insurance. Still, they require a VA funding fee that varies based on the borrower’s service type, loan amount, and whether it’s their first VA Loan. The fee supports the VA home loan program and may be included in the loan amount.
• What will make a house fail a VA inspection? A home may only succeed in a VA inspection if it meets certain safety, security, and structural integrity standards. Common issues include: Major structural damage, safety hazards, poor overall condition, inadequate roofing, and plumbing or electrical systems.
• Can I refinance a VA Loan? Yes, VA Loans can be refinanced. The Interest Rate Reduction Refinance Loan (IRL) is a refinancing option the VA offers for existing VA loans and Cash-Out Refinance loans. This enables the refinancing of non-VA loans to a VA loan.
• How long does it take to close a VA Loan? The closing time for a VA Loan can vary, but it typically takes about 30 to 45 days. This timeline may be shorter or longer based on the lender’s requirements, the borrower’s preparedness, and the specific details of the loan.

If you’re interested in VA Loans and have questions or need more information, contact a VA-approved lender like Gustan Cho Associates. We specialize in VA Loans and can provide guidance without implementing lender overlays.

This blog about the VA home loan requirements for 2024 was updated on April 25th, 2024.

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