VA Mortgage Loans With No Lender Overlays And Low Credit Scores

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VA Mortgage Loans With No Lender Overlays And Low Credit Scores

This BLOG On VA Mortgage Loans With No Lender Overlays And Low Credit Scores Was UPDATED On December 6th, 2018

President Franklin D. Roosevelt created and signed into law the Servicemen’s Readjustment Act in 1944.
This is more commonly known as the G.I. Bill, to reward veterans and qualified family members of the United States Armed Forces.
  • This generous bill for veterans by President Franklin D. Rooselvelt allocated funding for college education, books, unemployment benefits for veterans for a year, and housing benefits
  • Veterans with the housing benefits from the Department of Veteran Affairs get a Certificate Of Eligibility (COE) which enables them to qualify for VA Loans
  • VA Loans offers 100% financing
  • Qualified Veterans can purchase a home with no money down and no closing costs
  • 4% sellers concessions is allowed by home sellers to home buyer to cover closing costs
  • In the event sellers will not give sellers concessions, Lender can give lender credit to cover part or all closing costs

Benefits Of VA Mortgage Loans

The housing benefits came in the form of the VA mortgage loan. It enabled veterans of the United States Armed Forces to purchase a home without any down payment of their own.
  • Over 30 million veterans are eligible for VA loans under the Servicemen;s Readjustment Act:
    • It is also known as the GI Bill
  • No down payment required, 100% financing, on VA Loans

Guaranty On VA Loans

The VA guarantees a maximum of 25% of a VA loan amount and every veteran must qualify for the program if they want to participate in it.
  • One of the things that veterans who are interested in must qualify is the credit and income criteria
  • Having a COE by the Department of Veterans Affairs does not guarantee a veteran a VA Loan
  • Veterans need to qualify for VA Loans
  • Not all VA Lenders have the same requirements on VA Home Loans

Lenders Of VA Home Loans

VA mortgages are originated, funded, and serviced by the following financial institutions:
  • Banks
  • Mortgage Bankers
  • Credit Unions
  • Mortgage Brokers can broker VA loans to wholesale lenders
  • Other lending institutions that are VA Approved

Some of the mortgage loan lending criteria applies to veterans who served defending our country in war time;

  • World War II
  • Korean War
  • Vietnam War
  • Persian Gulf War
  • Recent war against terrorism, Afghanistan, and Iraq

Eligibility Of VA Mortgage Loans

Other veterans who qualify for a VA mortgage loan are those veterans who have completed at least 181 days of active duty or 90 days of active duty during the gulf war.
  • The VA eligibility certificate is also rewarded to veterans who were discharged from active duty due to disability, injury, medical condition, or budget cutbacks
  • It also applies to a spouse of a military veteran who has died on active duty and are not currently remarried
  • VA does not have a minimum credit score requirement
  • However, a 580 FICO credit score is preferred by most lenders
  • VA does not have any debt to income ratio requirements
  • As long as the veteran mortgage application gets an approve/eligible, the VA Loan should close with VA Lenders with no overlays
  • There is a two year waiting period after a Chapter 7 Bankruptcy to qualify for VA Loans
  • There is a two year waiting period after the recorded date of foreclosure and/or deed in lieu of foreclosure to qualify for VA Loans
  • There is a two year waiting period to qualify for VA Loans after a short sale
  • Veterans who are in a Chapter 13 Repayment Plan Bankruptcy can qualify for VA Loans one year into a Chapter 13 Bankruptcy with Trustee Approval
  • There is no waiting period after Chapter 13 Bankruptcy discharged date to qualify for VA Loans
  • Charge offs and collections do not have to be paid to qualify for VA Loans

Veterans with a COE who need to need more information on VA Loans, contact us at 262-716-8151 or text us for faster response. Or email us at gcho@gustancho.com. We are available 7 days a week, evenings, weekends, and holidays.

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