VA Loans Versus Other Loan Programs

VA Mortgage Approval Guidelines

Gustan Cho Associates are mortgage brokers licensed in 48 states

What does it take to get VA home loan approval?

  • You must first be eligible. Only servicemembers, honorably-discharged veterans and sometimes their families are eligible.
  • VA underwriting guidelines are flexible, with no minimum credit score an no minimum down payment.
  • However, you must be able to afford your loan and have no serious recent credit problems.

The VA mortgage program is an earned benefit for members of the US military. It’s one of the best mortgage programs available.

Prequalify for a VA home loan in about five minutes. 

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VA Funding Fee

What is government loan mortgage insurance

One of the requirements for a VA home loan is the funding fee. VA mortgages don’t require mortgage insurance even with zero down. However, the funding fee provides the same coverage as a mortgage insurance policy.

The difference with VA is that you pay the insurance upfront instead of in monthly installments. Because you’re not adding mortgage insurance to your monthly payment, you can afford to get a bigger mortgage and buy a better house.

You don’t have to pay the funding fee out of pocket if you don’t want to. Instead, you can add it to your loan amount.

The cost of the VA funding fee depends on several factors:

  • Down payment (10%, 5% or 0%)
  • Loan type
  • Use (first-time or subsequent)

The table below shows the different funding fees. Note that disabled military veterans may qualify to have the fee waived.


The VA allows mortgage lenders to qualify borrowers with a higher debt-to-income ratio (DTI) if they meet residual income requirements. That’s often a more generous way to underwrite borrower income.

VA-approved mortgage lenders often impose stricter requirements than the VA does. These overlays often limit a borrower’s DTI to 41% or lower. While lenders without overlays, like Gustan Cho Associates, may close loans with DTIs as high as 60% for highly qualified applicants.

VA Minimum Credit Score

The VA has set no minimum credit score for loan approval. However, that does not mean you’ll achieve loan approval if your recent credit history looks like a rap sheet.

The VA mortgage credit underwriting guidelines say:

In circumstances not involving bankruptcy, satisfactory credit is generally considered to be re-established after the borrower(s), have made satisfactory payments for 12 months after the date the last derogatory credit item was satisfied.

If a credit report reveals numerous unpaid collections and/or accounts that are not being paid timely, including some which have been outstanding for many years, then once the borrower has satisfied the
obligations, and then makes timely payments on subsequent obligations for at least 12 months, satisfactory credit is considered re-established.

How to qualify for VA loans and other loan programs

Ask an Expert

The Gustan Cho Team at Gustan Cho Associates does not have any overlays on VA Loans. Gustan Cho Associates Mortgage Group is nationally known for closing VA Loans With No Overlays in 21 days or less.

Borrowers with any questions on qualifying for a VA Loan, feel free to contact us. Gustan Cho Associates is a five-star national VA lender. We pride ourselves on 21-day closings. We impose no overlays on all government loan programs or conventional loans. Reach out to us at 800-900-8569 or text us for a faster response. Or email us at

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