This BLOG On How To Qualify For VA Loan With Bad Credit Was Written By Gustan Cho

One of the greatest benefits a Veteran of the United States Armed Services can get by serving our country is be eligible for a VA Loan. The VA Loan Program was launched back in 1944 to reward our Veterans for their service. Many Veterans returning from the second World Ward benefited from the newly created VA Loan where it made home ownership affordable and very easy which meant that Veterans can Qualify For VA Loan With Bad Credit or less than perfect credit. One of factors that really went in in creating the VA Loan Program was to streamline the complexities for Veterans applying for a VA Loan with bad credit by the following:

  • Being able for the veteran to qualify for VA Loan with bad credit or less than perfect credit
  • Reduce hassles of getting a mortgage loan
  • Making home buying process affordable by requiring no down payment
  • Allowing sellers concessions for Veteran home buyers of up to 4% so the Veteran home buyer does not have to come up with any closing costs out of pocket
  • If home sellers will not give sellers concessions, the VA Lender can offer lender credit in lieu of higher mortgage rate
  • VA Funding Fee can be rolled into the VA Loan so no money out of pocket for Veteran
  • A Veteran with a VA Loan can purchase a home with their VA Loan with zero down payment and zero closing cost and no money out of pocket
  • The government made a point that Veterans can qualify for VA Loan with bad credit because most military personnel who served our country oversees lacked credit, especially established good credit. Many Veterans did not have any money saved for a down payment on a home purchase
  • To honor our men and women in uniform, the United States government created the VA Loan Program as a way of rewarding and thanking our Veterans after the completion of their service in helping them become homeowners with a VA Loan

How Does VA Loans Work?

VA Loans are only limited to Veterans who have an honorable discharge with an active Certificate of Eligibility or COE. Here are the basics on VA Loans:

  • No money down. 100% financing
  • Up to 4% sellers concessions
  • VA Loan Limits is normally between $417,000 to more than $625,000. The VA Loan Limits depends on the county the property is located
  • The United States Department of Veteran Affairs, or VA, is not a mortgage lender and does not originate, fund, or service VA Loans
  • The Department of Veteran Affairs guarantees VA Loans to VA mortgage lenders and guarantees that all VA Loans will be paid and insured if the Veteran defaults on his or her VA Loan and the VA Loan goes into foreclosure

How To Qualify For VA Loan With Bad Credit?

Borrowers with a Certificate of Eligibility can qualify for VA Loan With Bad Credit. In general, VA Lenders want to see the following:

  • Veterans can qualify for VA Loan with Bad Credit but VA Lenders do want to see timely payment in past 12 months
  • Periods of bad credit is fine, but lenders want to see re-established credit
  • VA Lenders want to see stable income and good signs of anticipated income for next three years where the Veteran will be able to pay their new VA Loan timely and be able to pay all of their other monthly income comfortable and give them enough disposable income to be able to meet the VA requirements and standards for the cost of living. Stable income under the eyes of the VA is considered 2 years of the same employment.
  • You can qualify for a VA Loan with a 580 FICO credit score. However, many lenders require a higher credit score. VA does not have a credit score minimum. It is the VA Lender that requires and sets the credit scores. This is called a VA Lender Overlay
  • You can qualify for a VA Loan with up to 60% debt to income ratio. Sometimes, you can get an approve/eligible with a higher debt to income ratio than 60% if you have strong residual income. Contact Gustan Cho at 262-716-8151 or email us at if you have high debt to income ratio and are needing to qualify for a VA Loan
  • Borrowers can qualify for a VA Loan 2 years after a Chapter 7 Bankruptcy discharged date and no late payments after Bankruptcy discharged date
  • Borrowers can qualify for a VA Loan one year into a Chapter 13 Bankruptcy repayment plan. Borrowers can also qualify for a VA Loan right after a Chapter 13 Bankruptcy discharged date
  • There is a two year waiting period to qualify for a VA Loan after a recorded date of a foreclosure or deed in lieu of foreclosure
  • There is a two year waiting period to qualify for a VA Loan after the short sale date which is reflected on the settlement statement of the short sale
  • Deferred student loans that has been deferred more than 12 months are exempt from debt to income ratio calculations
  • Outstanding collection accounts and charge off accounts do not have to be paid to qualify for VA Loan

If you need to Qualify for VA Loan with bad credit and low credit scores, contact Gustan Cho at 262-716-8151 or email us at We have no lender overlays on VA Loans except do require a minimum of a 580 FICO Credit Scores. We are available 7 days a week, evenings, weekends, and holidays.

The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

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