VA Loans Ohio With Bad Credit And No Lender Overlays

This Article Is About VA Loans Ohio With Bad Credit And No Lender Overlays

Ohio is one of the hottest states for homebuyers. This holds especially true for active and retired members of the United States Military. Ohio ranks as one of the highest population states of veterans. All areas of Ohio, especially the Columbus housing market, remain to be a very lucrative market for both owner-occupant homebuyers and real estate investors.

Experts expect the Columbus area real estate market will skyrocket in 2022 and continue to remain strong in the years to come. Ohio attracts thousands of veterans annually due to the strong economy, great schools and universities, affordable housing, low property taxes, and low cost of living.

Veterans Buying Versus Renting Homes

Many veterans are migrating to Ohio from higher-taxed states with the high costs of housing. Veterans migrating to Ohio prefer buying a home versus renting. VA loans is the best loan program in the nation due to no down payment required, no annual mortgage insurance, no minimum credit score, no maximum debt to income ratio, no minimum credit score requirements, and has the lowest mortgage rates than any other loan program.   Speak With Our Loan Officer for Mortgage Loans in Ohio

The Booming Ohio Housing Market 

Data show that construction is increasing and cannot keep up with the demand for housing. Housing inventory will remain scarce throughout 2021 and into 2022. This holds true even with increased construction. High demand, low inventory, low taxes are the formula for rising home prices.

Columbus, Ohio is the 14th largest city in the United States. The city is attracting much active duty and retired members of the United States Military. Most veterans migrating to Ohio are homebuyers. Veterans rather purchase a new home versus renting. Many veterans who rent when they move to Ohio eventually end up buying a home within a year.

Thousands Of Veterans Are Migrating To The State Of Ohio

Many veterans of our armed services see Ohio as their forever home and are migrating to this state in record numbers. Columbus, Ohio is one of the fastest-growing cities in the United States with a population of 9 plus million residents Many cities and counties in Ohio have seen explosive growth year after year since 2012. It is expected to get much higher. The major demand for homes that far exceed the inventory of housing is skyrocketing home prices. However, home prices in Ohio is still reasonable and affordable compared to other states in the nation.

In this blog, we will discuss qualifying for VA Loans Ohio with bad credit and no lender overlays. Gustan Cho Associates is one of the few direct national lenders with no overlays on VA Loans.

VA Loans Ohio Requirements And Guidelines

VA Loans is the best owner-occupant mortgage loan program any home buyer can have. Only active-duty retired, and/or eligible surviving spouses of eligible veterans can qualify for VA loans. Our government created and implemented VA Home Loans to reward our members of the United States Armed Services.

The Veterans Administration Is The Federal Government Agency Backing VA Loans

The Department of Veterans Affairs (The VA) is the government agency that sets mortgage guidelines. The VA is not a lender and has nothing to do with the origination, funding, or servicing of VA loans. The VA acts as a guarantor for private lenders who originate and fund VA loans. VA will partially insure and guarantee any losses due to defaulting borrowers due to foreclosure. Due to this government guarantee, lenders can offer our veterans VA loans with 100% financing and no down payment at very low mortgage rates.

VA Loan Mortgage Guidelines By The Veterans Administration Versus VA Loan Requirements By Mortgage Lenders

The Veterans Administration is the federal government agency that is in charge of the agency mortgage guidelines and the administration of VA loans. The Veterans Administration is not a lender. The VA does not originate, process, underwrite, or fund VA loans. Private lenders such as banks and mortgage companies who are VA-approved originate, process, underwrite, fund, or service VA mortgages. The role of the VA is to promote homeownership to active and retired members of the U.S. Military by insuring lenders in the event borrowers of VA loans default and/or foreclosure on their VA loans.

The Role Of Ohio VA Lenders Versus The Role Of The Veterans Administration

If a borrower defaults or forecloses on their VA loan, the VA will partially guarantee and cover the loss by the lender. Due to the government guarantee of the VA, lenders are aggressively originating VA loans with no down payment required, no mortgage insurance, at lower rates than conventional loans. All lenders need to meet the minimum agency VA lending guidelines by the VA.

However, lenders can have higher lending standards than the minimum agency mortgage guidelines of the VA called lender overlays. Most lenders have lender overlays on VA loans.

Gustan Cho Associates has no lender overlays on VA loans. We have zero lender overlays on VA mortgages. Gustan Cho Associates has closed thousands of VA loans with credit scores down to 500 FICO and debt to income ratios surpassing 60% DTI.

There are two separate types of VA Mortgage Guidelines:

1. Agency Guidelines
2. Lender Overlays

Typical Ohio VA Loan Requirements Required By Lenders

All lenders require their borrowers to meet minimum agency VA Guidelines. Most lenders will have additional VA Guidelines that are above and beyond the minimum VA Guidelines which are called lender overlays. It is perfectly legal for mortgage companies to have higher lending requirements than the minimum agency VA agency guidelines. Here are the typical lender overlays on VA loans:

• Requiring higher credit scores when the VA does not have a minimum credit score requirement
• Requiring a debt to income ratio cap when the VA does not have a debt to income ratio requirement
• Not accepting manual underwriting on VA loans when the VA allow for manual underwriting on VA loans
• Not allowing borrowers in an active Chapter 13 Bankruptcy qualify for VA loans when the VA allow borrowers in an active Chapter 13 repayment plan to qualify for a VA loan one year into Chapter 13 Bankruptcy repayment plan with trustee approval
• Having waiting period requirements after Chapter 13 Bankruptcy discharged date when there is no waiting period requirement after Chapter 13 Bankruptcy discharged date
• Not accepting outstanding collections and/or charged-off accounts when old outstanding collections and charged-off accounts do not have to be paid to qualify for VA mortgages
• Requiring 3 traditional credit tradelines when tradelines is not a requirement

Again, it is beneficial for borrowers to fully understand the minimum agency VA guidelines. If you get denied from a lender on a VA loan, you will realize if you meet the minimum agency mortgage guidelines of the VA, you can qualify for a VA loan at a different lender with no lender overlays.   Speak With Our Loan Officer for VA Loans with no lender overlays

Ohio VA Mortgage Requirements Credit Scores

The Veterans Administration does not have a minimum credit score requirement on VA loans. For example, the VA does not have a minimum credit score requirement as long as the borrower can get an approve/eligible per automated underwriting system (AUS).

A lender may require a 640 minimum credit score as part of their overlays. Gustan Cho Associates Mortgage Group recently had a borrower with a 545 FICO and 60% DTI get an approve/eligible per automated findings. We approved, processed, underwrote, and closed this VA Loan. Most lenders will have denied this borrower if they did not have a 640 FICO and a debt to income ratio less than 50% DTI.

Gustan Cho Associates is a mortgage company licensed in multiple states with no lender overlays on VA Loans Ohio. We only go off the findings of the automated underwriting system. The majority of our borrowers have credit scores under 600 FICO and debt to income ratios higher than 60% DTI.

What is the VA Loan Limit in Ohio?

For 2024, the VA loan limit in Ohio is $766,550 for all counties. The maximum amount applies to VA Loans Ohio and VA home loans. This means qualified veterans with full VA loan entitlement can secure a loan up to this value without requiring a down payment. With full entitlement, there is no loan cap, enabling you to borrow as much as the lender can offer. However, for those with remaining entitlement—meaning they’ve used some of their VA loan benefits before—the loan limit of $766,550 is applicable.

Ohio VA Loan Guidelines And Requirements On VA Loans

Here are typical VA Lender Overlays Imposed By Lenders:

• Minimum credit score requirements: The VA does not mandate a minimum credit score requirement
• Lenders requiring a 620 or higher credit score are lenders with their own higher lending requirements on VA loans
• Maximum debt to income ratio cap: The VA does not have a maximum debt to income ratio requirement
• Timely payments in the past 12 months are required for borrowers with low credit scores and high debt to income ratio
• Pay off outstanding collections and charge off accounts
• The VA does not require borrowers to pay outstanding collections and/or charged-off accounts

Ohio VA Loans On Manual Underwriting

Manual Underwriting: The VA allows manual underwriting on VA Loans. VA and FHA loans are the only two loan programs that allow manual underwriting on home loans.

VA Loans During Chapter 13 Bankruptcy Repayment Plan

VA Loan During Chapter 13 Bankruptcy Repayment Plan:

• The VA allows borrowers to qualify during an active Chapter 13 Bankruptcy Repayment with Trustee Approval
• Needs to be a manual underwrite
• You need to be in the repayment plan for 12 months with timely payments
• Chapter 13 Bankruptcy does not need to be discharged
• The maximum debt to income ratio on manual underwriting is 40% front-end and 50% back-end with two compensating factors

VA Loan Requirements After Chapter 13 Bankruptcy Discharged Date

Waiting Period After Chapter 13 Bankruptcy discharged date:

• There is no waiting period after a Chapter 13 Bankruptcy discharge date as long as it is manual underwriting
• If the Chapter 13 Bankruptcy discharge has been seasoned for less than 24 months, it needs to be a manual underwrite
• No late payments during the past two years and timely payments during the Chapter 13 Bankruptcy repayment plan

How Many Times Can You Use a VA Loan in Ohio?

You can use VA Loans Ohio multiple times, with no limit to how many times you can take advantage of the VA home loan benefit. Here are the key points regarding the usage of VA Home Loans in Ohio:

1. Full Entitlement Restoration: You can restore your full entitlement if you have fully paid off your previous VA loan and sold the property. This allows you to use your VA loan benefit again without restrictions on the number of times.
2. Remaining Entitlement: If you have an active VA loan or have only partially used your entitlement, you can still use your remaining entitlement for another VA loan. The total loan amount may be subject to VA loan limits if you do not have full entitlement.
3. One-Time Restoration: If you have repaid a previous VA loan in full but still own the property, you can restore your entitlement once without selling the property.

In summary:

• There is no limit on how many times you can use VA Loans Ohio.
• Entitlement can be restored after paying off and selling a property.
• Partial entitlement can be used if there is remaining entitlement available​​.

For more detailed guidance, consult a VA loan specialist or a lender experienced with VA Home Loans, like Gustan Cho Associates.

Can Anyone Assume a VA Loan in Ohio?

Yes, VA Loans Ohio can be assumed by another party, but there are specific conditions and requirements to meet:

1. Eligibility of the Assumee: The person assuming the VA loan does not need to be a veteran or service member. However, they must meet the lender’s credit and income requirements to qualify for the loan assumption.
2. VA Approval: VA Home Loans in Ohio must be approved by the VA for assumption. The VA requires the new borrower to assume all obligations of the original loan, including the repayment of any missed payments.
3. Release of Liability: The original borrower must meet the VA’s criteria to release the new borrower from liability. If the new borrower is a veteran, they can substitute their entitlement for the seller’s entitlement, freeing up the seller’s VA loan benefits for future use.
4. Assumption Fee: There is typically a processing fee for assuming a VA loan, which may include a funding fee lower than required for a new VA loan.

Anyone who meets the lender’s requirements can assume VA Loans Ohio. Still, the process involves approval from the VA and adherence to specific guidelines.   Connect with our expert for VA Loans in Ohio

Qualifying For VA Loans With A Mortgage Company Licensed In Multiple States With No Lender Overlays

Over 75% of our borrowers at Gustan Cho Associates could not qualify for home loans at other lenders due to their overlays. Gustan Cho Associates is a mortgage company licensed in multiple states with no lender overlays on VA Loans Ohio. Gustan Cho Associates is a mortgage banker, correspondent lender, and mortgage broker. We have alternatives to government and conventional loans. Gustan Cho Associates has dozens of lending relationships with non-QM and specialty wholesale mortgage lenders.

FAQs: VA Loans Ohio With Bad Credit And No Lender Overlays

• 1. What Are VA Loans? VA Loans are mortgage loans provided to veterans, active-duty service members, and eligible surviving spouses. These loans offer benefits such as no down payment, no private mortgage insurance, and competitive interest rates, making homeownership more accessible for those who have served in the military.
• 2. Can I Get a VA Loan in Ohio With Bad Credit? Yes, you can get a VA Loan in Ohio with bad credit. The VA does not set a minimum credit score requirement, but individual lenders may have their own standards, known as lender overlays. Some lenders, like Gustan Cho Associates, offer VA home loans with no lender overlays, allowing approval for borrowers with lower credit scores.
• 3. What Are the Requirements for VA Home Loans in Ohio? One must meet certain basic requirements to qualify for a VA Home Loan in Ohio. These include being a veteran, an active-duty service member, or an eligible surviving spouse. Additionally, one must have satisfactory credit and income that meets the lender’s criteria, possess a valid Certificate of Eligibility (COE) from the VA, and adhere to any additional guidelines specified by the lender.
• 4. What Is the VA Loan Limit in Ohio for 2024? The VA loan limit in Ohio for 2024 is $766,550. This limit applies to VA Loans Ohio and VA Home Loans, meaning qualified veterans with full VA loan entitlement can secure a loan up to this value without requiring a down payment.
• 5. How Many Times Can You Use a VA Loan in Ohio? Ohio has no limit to how many times you can use a VA loan. You’re allowed to use the benefit multiple times under certain conditions. Your full entitlement is restored if you fully repay your previous VA loan and sell the property. Additionally, suppose you have an active VA loan or have only partially used your entitlement. In that case, you can still tap into the remaining entitlement. Moreover, suppose you’ve repaid a previous VA loan in full. In that case, you have the option for a one-time restoration of your entitlement without selling the property.
• 6. Can Anyone Assume a VA Loan in Ohio? In Ohio, another party can assume a VA Loan. However, specific conditions must be met for this to occur. Firstly, the individual looking to assume the loan needs to meet the lender’s criteria for creditworthiness and income. Additionally, the assumption of VA Home Loans in Ohio requires approval from the VA. The original borrower must also satisfy the VA’s requirements to be released from liability. Generally, there is an assumption fee associated with this process.

Borrowers who need to qualify for VA, USDA, FHA, Conventional Loans with no lender overlays, please contact us at 800-900-8569 or text us for a faster response. Or email us at gcho@gustancho.com.com. We have a national reputation for our no-lender overlays business model. Gustan Cho Associates is known by many for being able to do loans other lenders cannot do.

This blog about VA Loans Ohio With Bad Credit And No Lender Overlays was updated on June 13th, 2024.