VA Refer-Eligible Findings Versus AUS Approval Guidelines

VA Refer-Eligible Findings Versus AUS Approval Guidelines

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In this blog, we will discuss and cover VA refer-eligible findings versus AUS approval guidelines. The United States Department of Veterans Affairs commonly referred to as The VA, is the parent federal agency that administers VA Home Loans for the active and retired members of our Military. 

In the complex real estate landscape, the intersection of Veterans Affairs (VA) refer-eligible findings and Automated Underwriting System (AUS) approval guidelines has become a critical focal point for lenders and homebuyers.

Understanding the nuances of these two components is essential for successfully navigating the home loan approval process and ensuring eligible veterans receive the benefits they deserve. This article explores the fundamental elements of VA refer-eligible findings and AUS approval guidelines, exploring their differences, implications, and impact on the homebuying experience.

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VA Refer-Eligible Findings

The primary aim of the VA loan program is to offer accessible and affordable housing options to qualifying veterans and service members. Upon submitting an application for a VA loan by a veteran, the lender submits the loan application to the Department of Veterans Affairs for evaluation. Borrowers with VA Refer-Eligible Findings can still get a VA Loan Approval with a manual underwrite.

The VA’s automated system reviews the application and issues an approval, a referral, or an invalid determination. A “refer” status means the application requires further manual review by a VA underwriter.

This may be due to complex financial situations, incomplete documentation, or unique property considerations. While a refer status doesn’t necessarily mean denial, it signals the need for additional scrutiny to ensure the loan complies with VA guidelines. Both lenders and borrowers must understand that a refer-eligible finding does not equate to rejection. Instead, it initiates a more in-depth assessment to determine the loan’s viability and adherence to VA standards. This meticulous review process is in place to protect the interests of both the veteran borrower and the lending institution.

VA Refer-Eligible Findings Manual GuidelinesGustan Cho Associates

On the other side of the spectrum, Automated Underwriting Systems play a pivotal role in the mortgage approval process across various loan programs, including VA loans. AUS utilizes algorithms to analyze a borrower’s financial profile and credit history, generating an automated decision regarding the loan application’s approval or denial.  The AUS approval is based on a set of guidelines and criteria established by the lending institution.

Automated Underwriting System (AUS) approval guidelines take into account various factors, including credit score, debt-to-income ratio, employment history, and additional financial indicators.

The automated process streamlines the approval of straightforward loan applications, offering efficiency and speed in decision-making. However, not all applications receive immediate approval from AUS.

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Minimum VA Eligibility Guidelines

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If borrowers meet the minimum VA Eligibility Mortgage Guidelines, they should get an approve/eligible per automated underwriting system (AUS). Let’s go over the minimum VA Agency Guidelines: The VA allows up to 100% financing with no down payment. Closing costs can be covered with seller concessions or lender credit.

There is no minimum FHA loans vs VA loans. There are no maximum debt-to-income ratio requirements. Outstanding collections or charge-off accounts do not have to be satisfied.

There is a two-year waiting period after Chapter 7 Bankruptcy, foreclosure, deed in lieu of foreclosure, or short sale to qualify for VA Loans. Borrowers in a Chapter 13 Bankruptcy Repayment Plan can qualify for VA Home Loans after being on the repayment plan for at least 12 months and Trustee Approval with a manual underwrite. There is no waiting period after the Chapter 13 Bankruptcy discharge date with a manual underwrite.

AUS Approval Guidelines

For all Chapter 13 Bankruptcy discharge that has been seasoned for less than 24 months, the VA loan needs to be manually underwritten. If the above conditions are met, the borrower should get approve/eligible per automated underwriting system. If for one reason or another the borrower does not get an AUS Approval and gets a VA Refer-Eligible Findings, the VA loan can still go forward with a manual underwrite. VA Manual Underwriting Guidelines apply.

In this section, we will cover the VA Manual Underwriting Guidelines. Must meet all VA Guidelines. No minimum credit score requirements. No late payments in the past 24 months unless they are medical or extenuating circumstances.

Verification of rent. If a borrower does not have verification of rent, then they need to sign a rent-free letter certifying that the borrower is living with a family member. Compensating Factors is very important for borrowers with higher debt-to-income ratios. Maximum debt to income ratios on VA manual underwriting is 50% DTI with compensating factors. Underwriter discretion is used if the debt to income ratio exceeds 50% DTI.

Distinguishing Between VA Refer-Eligible Findings and AUS Approval:

While VA refer-eligible findings and AUS approval are integral to the loan approval process, they operate independently. AUS evaluates a loan application based on a predefined set of criteria, focusing on financial metrics and creditworthiness. In contrast, VA-refer-eligible findings are specific to the VA loan program.

They may arise due to factors beyond the scope of AUS considerations, such as unique aspects of a veteran’s military service or property-related issues.

The key distinction is that a refer-eligible finding is a status within the VA loan evaluation process, prompting manual review. In contrast, AUS approval is an automated decision by the lender’s underwriting system. Understanding this difference is crucial for borrowers, lenders, and real estate professionals to navigate potential challenges effectively.

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Navigating Challenges and Ensuring Success

When a VA loan application receives a refer-eligible finding, the lender and the borrower must collaborate closely during the manual underwriting process. Clear communication and timely submission of additional documentation can expedite the review and increase the likelihood of a favorable outcome.

Veterans are encouraged to work with experienced lenders who possess expertise in the complexities of VA loans and can provide guidance through the process whole process.

Lenders, in turn, should maintain open lines of communication with the VA and leverage their understanding of AUS approval guidelines to address any overlapping issues promptly. By proactively managing the complexities inherent in the loan approval process, lenders can provide valuable support to veterans seeking to achieve their homeownership goals.


In VA loans, the interplay between refer-eligible findings and AUS approval guidelines requires a nuanced understanding to guarantee a seamless and prosperous home purchasing journey for veterans. Navigating these intricacies demands collaboration between borrowers, lenders, and the VA, emphasizing the importance of communication and expertise in achieving positive outcomes. As the mortgage lending landscape evolves, a comprehensive grasp of these processes will remain fundamental in empowering veterans to access the benefits they deserve. For more information about this blog, please contact us at Gustan Cho Associates at 800-900-8569 or text us for a faster response. Or email us at

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