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VA Minimum Credit Score Guidelines To Qualify For VA Loans

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VA Minimum Credit Score Guidelines To Qualify For VA Loans

This BLOG On VA Minimum Credit Score Guidelines To Qualify For VA Loans Was PUBLISHED On June 7th, 2019

VA Home Loans is the best loan program for home buyers.

  • Not everyone qualifies for VA Loans
  • Borrowers need to have served a certain period of time in one of the branches of the United States Armed Services and have earned with a VA Certificate Of Eligibility (COE)
  • The U.S. Department of Veterans Affairs (The VA) has created and launched VA Loans to reward our brave active and retired members of our military to enable them to purchase homes with zero money down and 100% financing
  • The VA helped millions of veterans become homeowners in the past several decades
  • Being eligible for VA Loans is one of the greatest benefits in being an active and/or retired member of our fine military
  • Surviving spouses of eligible veterans may also be eligible for VA Home Loans

In this blog, we will discuss the VA Minimum Credit Score Guidelines and other eligibility requirements to qualify for VA Loans.

VA Minimum Credit Score Guidelines Versus Other Loan Programs

All mortgage loan programs, with the exception of VA Home Loans, have minimum credit score requirements.

  • For example, HUD, the parent of FHA, requires a minimum credit score requirement of 580 FICO for a 3.5% down payment FHA Loan
  • Borrowers can qualify for FHA Loans with under 580 FICO
  • However, borrowers with credit scores between 500 to 579 FICO, HUD requires the home buyer to put 10% down payment on a home purchase. Fannie Mae and Freddie Mac require a 620 FICO for borrowers to qualify for conventional loans
  • However, there is no VA Minimum Credit Score Guidelines on VA Loans
  • The VA has the most lenient mortgage guidelines out of any other agency guidelines
  • This is due because statistics prove that veterans have lower credit profiles than their civilian counterparts

It is often difficult to maintain timely payments for veterans when they are deployed and/or get transfers every few years.

Agency VA Minimum Credit Score Guidelines Versus Lender Overlays

Over 75% of our borrowers at Gustan Cho Associates are folks who could not qualify at other lenders due to their lender overlays.

  • Overlays are mortgage guidelines that are above and beyond the VA Minimum Mortgage Guidelines
  • Most lenders do have lender overlays on VA Loans
  • Gustan Cho Associates is one of the very few national lenders with no lender overlays on VA Loans
  • We just go off Agency Guidelines and have no other lending requirements of our own
  • As long as the borrower can get an approve/eligible per automated underwriting system (AUS) and the borrower can meet the conditions on the AUS, we will close the loan
  • Per Agency VA Minimum Credit Score Guidelines, there are no minimum credit score requirements to qualify for VA loans
  • As long as the borrower can get an approve/eligible per AUS, borrowers can qualify for VA Loans with low credit scores
  • There are countless of VA borrowers with under 600 FICO at Gustan Cho Associates we have originated and closed on their VA Loans
  • You do not need a 620 or 640 credit score to qualify for VA Loans

Lenders that require a minimum credit score requirement on VA Home Loans are lenders who have overlays and cannot afford to take on layered risks with low credit score borrowers.

For more information on this blog and/or other mortgage topics, please contact us at Gustan Cho Associates at 262-716-8151 or text us for faster response. Or email us at gcho@loancabin.com. The Team at Gustan Cho Associates Mortgage Group are available 7 days a week, evenings, weekends, and holidays.

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