VA Guidelines After Short Sale

VA Guidelines after Short Sale Waiting Period on VA Loans

Gustan Cho Associates are mortgage brokers licensed in 48 states

This blog will discuss the VA guidelines after short sale waiting period requirements to qualify for a VA loan. VA guidelines after short sale to qualify for a VA loan require a mandatory waiting period of two years for borrowers to qualify for a VA loan. Lenders expect no late payments after the short sale and re-established credit.

Qualifying for VA loans is much easier than any other loan program. The United States Department of Veteran Affairs offers excellent benefits for our Veterans who have served in any of our branches of the U.S. Military and have gotten an honorable discharge.

VA loans are the best mortgage loan program in the nation for owner-occupant primary home purchases.  Homebuyers can purchase a one to four-unit owner-occupant residential home with a VA loan. The VA rewards our military members with a Certificate of Eligibility, or COE, to qualify for VA loans. Unfortunately, VA loans are only for active duty, and retired members of the United States Military with a COE are eligible for VA loans. In the following paragraphs, we will discuss the VA guidelines after short sale waiting period requirements to qualify for a VA loan.

Benefits Of VA Home Loans Versus Other Loan Programs

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In this section, we will cover VA loan benefits and qualification requirements. VA loans are only available for Veterans of the United States Armed Forces who have gotten an honorable discharge and have been awarded a Certificate of Eligibility. John Strange, a senior loan officer and expert in helping borrowers on VA loans with lower credit scores and manual underwrites, explains the Certificate of Eligibility as follows:

The Certificate of Eligibility is also referred to as a COE. VA loans do not require any down payment by the Veteran home buyer. Veteran homeowners needing to refinance can refinance up to 100% Loan To Value or LTV.

VA allows up to 100% LTV on VA cash-out refinance loans. VA loans are for owner-occupant properties only. You can purchase a one to four-unit residential owner-occupant property with a VA loan. We have no lender overlays on VA loans. There is no Credit Score to qualify for a VA loan.

VA Credit and Income Guidelines on VA Loans

Gustan Cho Associates go off the Automated Underwriting System FINDINGS. There are no debt-to-income ratio requirements on VA loans. There are no debt-to-income ratio requirements on VA loans with Gustan Cho Associates. I recently got an approve/eligible per DU FINDINGS on a Veteran Borrower with a 582 FICO Credit Score and a 58% debt-to-income ratio due to the Veteran borrower having a high residual income.

VA does allow co-borrowers on the VA loan, but only married spouses can be co-borrowers. Unlike FHA loans, VA does not allow for non-occupant co-borrowers. The Veterans Administration does allow home buyers to get a 4% seller concession by the home seller to be used for closing costs. VA has a one-time funding fee which can be rolled into the VA loan.

There is a two-year waiting period to qualify for VA loans after the Chapter 7 bankruptcy discharge date. Borrowers can qualify for VA loans during the Chapter 13 Bankruptcy Repayment Period. Need 12 months into a Chapter 13 Bankruptcy Repayment Plan with Trustee Approval. VA loans during Chapter 13 Bankruptcy repayment plans need to be manual underwriting. There is no waiting period to qualify for VA loans after the Chapter 13 Bankruptcy discharge date.

VA Guidelines Versus Lender Overlays

There are two types of lending requirements. VA agency guidelines are the minimum VA lending requirements from the veteran Administration. However, most lenders have overlays on VA loans. Overlays are additional lending requirements of the lender that is higher than the minimum agency guidelines of the Veterans Administration. VA does not require mortgage insurance premiums even though most VA loans have 100% Loan To Value. The team at Gustan Cho Associates are experts in helping borrowers qualify and get approved on the following VA mortgage loan options:

VA loans have the most lenient guidelines versus other mortgage loan programs. There is no down payment requirement on VA loans. There is no maximum loan limit. Theres is no mortgage insurance premium. VA loans do not have a minimum credit score requirement or a maximum debt-to-income ratio. The United States Congress has created lenient mortgage eligibility guidelines on VA loans so our brave men and women in uniform can have easy access for a home purchase.

VA Guidelines After Short Sale Versus Other Loan Programs

In this section, we will cover the VA guidelines after short sale. Veteran home buyers can qualify for a VA loan after a prior short sale. There is a two-year mandatory waiting period to qualify for a VA loan after Borrower had a prior short sale under VA Guidelines After Short Sale. Ronda Butts, a dually licensed realtor and loan officer at Gustan Cho Associates, explains the two-year waiting period state date after foreclosure for the borrower to qualify for a VA loan:

Under VA Guidelines After Short Sale, the two-year time clock on the two-year waiting period after a short sale to qualify for a VA loan starts from the date of the short sale that is reflected on the HUD Settlement Statement.

You can qualify for a VA loan with outstanding collection accounts and charge-off accounts without paying the outstanding balances. This holds true as long as you get an approve/eligible per Automated Underwriting System—no late payments since the short sale date. If you do have one or two late payments due to extenuating circumstances, that is not a deal killer.

VA Guidelines After Short Sale Versus Other Mortgage Programs

This section will compare the VA guidelines after short sale versus other mortgage loan programs. VA guidelines after short sale are two years from the short sale date. Per VA guidelines after short sale, borrowers can qualify for a VA loan and buy a house after a prior short sale. HUD requires a three-year waiting period to qualify for an FHA loan after a short sale versus a two-year waiting period after a short sale to qualify for a VA loan.USDA loans also require a three-year waiting period to qualify for a USDA loan after a short sale versus a two-year waiting period after a short sale to qualify for a VA loan. Dale Elenteny, an expert on VA loans, said the following about VA loans:

Generally, VA loans have the most lenient guidelines versus other traditional mortgage loan programs.  FHA and USDA loans require a three-year waiting period after a short sale for borrowers to qualify for FHA or USDA loans. Fannie Mae and Freddie Mac require a four year waiting period after short sale. VA loans only requires a two-year waiting period after short sale for VA loans.

Fannie Mae and Freddie Mac, Conventional loans require a four-year mandatory waiting period to qualify for Conventional loans versus a two-year waiting period after a short sale to qualify for a VA loan. If you are looking for a lender with no overlays on VA loans or have any questions about VA loans, please get in touch with Gustan Cho Associates at 800-900-8569 or text for a faster response. You can also email us at gcho@gustancho.com. We are available seven days a week, evenings, weekends, and holidays to take your mortgage inquiry.

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2 Comments

  1. Can a VA loan be used to buy another home while living in a home which is up for sale? The current home was not purchased using a VA loan. A short sale was however used in year 2009 to sell a VA purchased home.

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