VA Loans Guidelines

You have decided you want to buy a house. More importantly, you have decided to use your VA Loan benefit as a way to finance that house because of the many advantages of the VA Loan, like No Down Payment and No Monthly Mortgage Insurance. Not to mention the great, low interest rates you can get with a VA Loan. But before you get going on that VA Loan Purchase, what are the VA Loan Guidelines?

Basic VA Loan Uses Include:

• To purchase or construct a residence to be owned and occupied by the veteran as a home.
• To refinance an existing VA-guaranteed or direct loan for the purpose of a lower interest rate.
• To repair, alter, or improve a residence owned by the veteran and occupied as a home.
• To simultaneously purchase and improve a home.
• To purchase a farm residence to owned and occupied by the veteran as a home.
• To purchase a one-family residential unit in a condominium housing development approved by VA.

VA Loans cannot be used for Land Loans or Investment Properties.

Eligibility

If you were honorably discharged with at least two years service or you are still on active duty, you are eligible for a VA Loan. Reservists also qualify with six years of service or 90 days or more deployed to a combat zone. Spouses of deceased veterans can also qualify.

Income

The following are primarily what a VA-Approved Underwriter will look at when it comes to your income, based on the ability to verify and identify income available to cover:

• The Mortgage Payment
• Debts and Obligations
• Family Living Expenses
• Any other Shelter-related expenses

The VA also wants to make sure that the verified income is:

• Stable and Reliable
• Anticipated to continue during the foreseeable future
• Sufficient in amount

The VA requires a 12-month working history, proving that you've been at the same job for at least 12 months, however most VA Lenders require at least a 24-month working history in the same field. Changing employers in that timeframe are acceptable; however you may be required to include a letter of explanation for the change. Second or part-time jobs can also be included towards your income; however the VA does require a 24-month history of working a second or part-time job.

Finally, there are credit requirements. The VA is more relaxed with its credit requirements; however that does not mean VA gives loans to anybody. The VA does look at the last 12 months of your credit history to ensure timely payments and few to no late payments. There is no minimum credit score requirement, however most VA Lenders have a minimum score requirement.

Regarding Bankruptcies, the VA requires a borrower be 24 months removed from a discharged Ch. 7 Bankruptcy and 12 months removed from a discharged Ch. 13. A foreclosure on a borrower's credit history does not disqualify that veteran from a VA Loan, however in most cases the foreclosure needs to be 24-36 months removed before most VA Lenders will accept a new VA Loan application. If the foreclosure was on a VA Loan, the borrower has lost his or her VA Home Loan Entitlement. For more questions about VA Mortgage Guidelines, please contact me here