VA Loans With 580 Credit Scores Mortgage Guidelines

This  ARTICLE On VA Loans With 580 Credit Scores Mortgage Guidelines 

Many borrowers do not realize that they can get qualified for VA Loans With 580 Credit Scores. Actually, the U.S. Department of Veteran Affairs has no minimum credit score requirements on VA Loans. However, in order to get an approve/eligible per Automated Underwriting System Findings, a 580 credit score is highly recommended.

There are two types of VA Guidelines:

  • VA Guidelines
  • Lender Overlays

In this article, we will discuss and cover VA Loans With 580 Credit Scores Mortgage Guidelines.

VA Agency Guidelines Versus Overlays

VA Loans With 580 Credit Scores Mortgage Guidelines

All VA Lenders need to have their veteran borrowers meet VA Guidelines. Lenders Overlays are optional and it is up to the lender on the types of overlays they want to implement.

Here is an example of VA Lender Overlays:

Overlays On Credit Scores:

  • VA does not have a minimum credit score requirement
  • Many lenders require a 620 credit score although VA does not require any minimum credit scores
  • This is called VA Lender Overlays On Credit Scores

Overlays On Debt To Income Ratios:

  • Most lenders require a cap on debt to income ratio on veteran borrowers
  • VA does not have a cap on debt to income ratios

Overlays On Collections And Charge Offs:

  • Many lenders require that charged off and collection accounts to be paid off
  • Veteran borrowers can qualify for VA Home Loans with outstanding charged offs and collections without having to pay them off
  • This is called overlays on collections and charged-off accounts on VA Loans

Gustan Cho Associates has no mortgage overlays on VA Home Loans. We just go off VA Guidelines and Overlays do not exist.

VA Mortgage Process

Often many borrowers who are Veterans with a Certificate of Eligibility are told by lenders that they cannot qualify for a VA Loan without having a credit score of at least 620:

  • Other lenders turn Veterans down because they tell them that VA has minimum credit scores of 640
  • Veterans with a valid COE can qualify for VA Loans With 580 Credit Scores
  • This is not the case
  • The United States Department of Veteran Affairs, VA, has one of the most lenient mortgage guidelines out of all mortgage programs in the Country
  • VA realizes that Veterans often do not have the best of credit, especially due to transfers that can happen several times per calendar year as well as deployment

During wartime, it is often difficult to worry about paying their minimum monthly debts overseas and injuries are often common while serving in the United States Military.

About The Department Of Veterans Affairs

The United States Department Of Veterans Affairs is not a mortgage lender and does not originate, fund, or services VA Loans.

  • The Veterans Administration insures residential home loans that private mortgage lenders make to United States Veterans who meet the VA Guidelines
  • In the event, if the Veteran borrower were to default on his or her VA Loan, the Veterans Administration will insure that mortgage lender against the defaulted and/or foreclosed VA Loan

This VA guaranty makes it extremely desirable for private lenders to fund VA Loans due to little to no risk due to the insurance and guarantee by the federal government against losses on VA Loans.

How Much Do I Need To Qualify For VA Loans With 580 Credit Scores

One of the greatest benefits our government gives our Veterans for serving our country and has received an honorable discharge is a Certificate of Eligibility to qualify for VA Loans.

Here are the benefits of VA Loans:

  • No down payment required for VA Loans
  • There is a VA Funding Fee
  • The VA Funding Fee can be rolled into the VA Loan
  • There is no need for money out of pocket by the Veteran for the down payment
  •  VA Loan Limits for no money down with no maximum loan limit
  • However, the VA does not have a maximum loan limit
  • There are closing costs on all home purchases and refinances
  • However, on purchases, VA allows the home seller to give the home buyer up to a 4.0% sellers concession towards the home buyer’s closing costs
  • If the veteran home buyer is short on closing costs or if the home seller is not willing to give a sellers concession, the Veteran can get a lender’s credit to cover part or all of the closing costs
  • There is no mortgage insurance premium on VA Loans

Bottom line is that a Veteran with a COE does not need a penny to purchase a home with a VA Loan.

VA Credit Requirements To Qualify For VA Loans With 580 Credit Scores

Qualifying for VA Loans with 580 Credit Scores is no problem at all. VA credit requirements are extremely lenient.

  • However, Mortgage Lenders are not expected to abide by the minimum VA Credit Guidelines
  • Lenders do have to meet the minimum VA Lending Guidelines
  • However, they can set higher standards of their own which are called Lender Overlays
  • Most Mortgage Lenders will set a minimum credit score requirement of at least a 620 Credit Score or higher

There are lenders like Gustan Cho Associates that will approve Veterans for VA Loans with 580 credit scores and sometimes lower.

VA Has No Minimum Credit Score Requirements

Here are VA Credit Requirements:

  • VA does not have a mandatory minimum credit score requirement
  • VA lets the lender set the minimum credit score requirement
  • Most lenders who are approved with the VA to originate and close on VA Loans have Lender Overlays on Credit Scores on VA Loans
  • Lender Overlays are the individual lender’s requirement which is above and beyond of those of the Department of Veteran Affairs
  • Most lenders will set lender overlays on credit scores at 620 to 640
  • Gustan Cho Associates has no lender overlays on VA Loans
  • VA does not have a maximum debt to income ratio requirement

I recently got an approve/eligible per Automated Underwriting Approval Findings on a borrower with a 552 credit score and a 58% debt to income ratio.

Qualifying For VA Home Loans After Bankruptcy And Housing Event

Lender That Specializes In VA Loans With 580 Credit Scores With No VA Lender Overlays

There are waiting period after bankruptcy and/or housing event to qualify for VA Home Loans:

  • 2 year waiting period to qualify for a VA mortgage loan after a Chapter 7 Bankruptcy

2 year waiting period after housing event:

  • Date of the prior short sale date
  • Recorded dates of foreclosure and/or deed in lieu of foreclosure

If you have deferred student loans that are deferred for at least 12 or more months, it will be exempt from debt to income ratio calculations

Again, VA Loans are one of the easiest mortgage loan programs to qualify for. However, not all can qualify for VA Loans. Only the men and women who have served in the United States Armed Services with a valid Certificate of Eligibility can qualify for this great loan program.

Lender That Specializes In VA Loans With 580 Credit Scores With No VA Lender Overlays

I get countless calls by Veterans who shop for VA Loans and are told that they qualify for FHA Loans but not VA Loans with 580 Credit Scores. Again, this is not the requirements of the Veterans Administration BUT because the lender went to have lender overlays. There is no reason why a Veteran who can qualify for an FHA loan cannot qualify for a VA Loan

  • Veteran Borrowers were told NO on a VA Loan BUT Yes on an FHA Loan, please contact us at Gustan Cho Associates
  • As long as borrowers can get an approve/eligible per Automated Underwriting System and can clear the conditions on the AUS, we will close on VA Loan with with no lender overlays
  • We have a national reputation on closing VA Loans in 21 days from the date e-Disclosures are signed on VA Loans

Veteran Borrowers need to consult with a national VA direct mortgage lender that specializes in VA Loans with with no lender overlays, contact us at Gustan Cho Associates at the contact information below:

Cell: 262-716-8151 Please Text For Faster Response With Contact Information Including Email Address. Or email us at

Available 7 days a week, evenings, weekends, and holidays

  1. Gizianne says

    Thanks I am a veteran with that range and good income. I will be reaching out in a few weeks.

    1. Gustan Cho, NMLS 873293 says

      Sounds great. Please contact us whenever you are ready at or call us at 262-716-8151 or text us for a fast response.

  2. Scott says

    do you cover Texas?

    1. Gustan Cho, NMLS 873293 says

      Yes we do.

  3. mike mayes says

    Do you provide VA loans in Alabama?

    1. Gustan Cho, NMLS 873293 says

      Yes we do. We are licensed in Alabama. Please reach out to us at or call us at 262-716-8151. Or text us for a faster response.

  4. Ms. Hewitt says

    I want to buy a 4bdrm 2 one story home for my family in Katy, TX using my VA loan. Have a few challenges, but I am hoping you can work your magic. My kids finish school I believe right after memorial day. It would be the the ultimate surprise for my kids.

    1. Gustan Cho, NMLS 873293 says

      Please reach out to us at or call us at 272-716-8151. Text us for a faster response.

  5. G. Latrice Crouch says

    Hello, I was wondering if you have any tips on passing the NMLS exam. I did not pass the first time and would like to pass the second time around. I work 13 to 15 hours a day five days out of the week. Need help!!!!

    1. Gustan Cho, NMLS 873293 says

      You need to do more practice exams. Contact David Reinholtz at You need a 75% to pass.

  6. Dale Elenteny says

    I’m sure you have heard about Gustan Cho Associates Wholesale which is a partner with a Federally Chartered Bank based in New York. They have programs that no other company offers in the industry. George Makoutz knows upper management at Gustan Cho Associates.

    No Ratio

    No income or No Employment required. The borrower can be retired, unemployed, W2’d, or Self Employed.
    Minimum Fico 700
    One month bank statement required for reserves and funds to close.
    Max LTV 75%
    100% Gift ok
    This is essentially an ALTA A product

    Borrower Prepared P&L (Stated)

    Self Employed borrower prepares P&L and does not have to be audited by a CPA
    CPA only verifies that the borrower has been self-employed for two years.
    Quontic who is self-employed for less than two years but working in the same field for over two years. A good example would be a truck driver switching from W2 to 1099.
    One month Bank Statement
    3 months PITI Reserves

    I have several realtors with clients that need this program.


    Dale Elenteny

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