VA Refer-Eligible Findings Versus AUS Approval Guidelines

VA Refer-Eligible Findings Versus AUS Approval Guidelines

Gustan Cho Associates are mortgage brokers licensed in 48 states

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.

The VA sets the minimum lending standards for lenders to follow on VA loans if the lender wants the VA to insure the VA Mortgages they originate and fund. All lenders need to follow minimum VA Guidelines if they want the VA loans they fund guaranteed by the VA in the event the borrower defaults and the property goes into foreclosure. The VA has the most lenient mortgage guidelines when it comes to credit/income.

What Are The Minimum Credit Score Requirements on VA Loans?

There are no minimum credit score requirements on VA loans. There is no maximum debt-to-income ratios on VA loans. However, the borrower needs to get an approve/eligible per automated underwriting system findings (AUS). However, if the borrower cannot get an automated underwriting system approval and gets a VA Refer-Eligible Findings, the loan process can still proceed with manual underwriting. In this blog, we will discuss VA Refer-Eligible Findings Versus AUS Approval Guidelines.

Minimum VA Eligibility Guidelines Cho Associates-MortgageBankers

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 and/or lender credit
  • There is no minimum FHA loans vs VA loans
  • There are no maximum debt-to-income ratio requirements
  • Outstanding collections and/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
  • 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.

VA Refer-Eligible Findings And Manual Underwriting

The automated underwriting system (AUS) is a sophisticated computerized automated underwriting system that takes data of a borrower and renders an automated approval and/or denial on government and/or conventional loans. The AUS renders the following automated findings:

  • Approve/Eligible which means the file has an automated underwriting system approval
  • Refer/Eligible which means the file may be eligible but needs a human mortgage underwriter to underwrite the file
  • Refer With Caution which means the borrower does not meet VA Guidelines and does not qualify

Borrowers with VA Refer-Eligible Findings can still get a VA Loan Approval with a manual underwrite.

VA Refer-Eligible Findings Manual GuidelinesGustan Cho Associates

Here are 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 and/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

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