Page updated: May 26, 2021
Yes, A VA Home Loan Is Possible with Bad Credit
When researching how to get approved for a mortgage, you’ll likely read about the importance of your credit score. While most mortgage programs put a premium on your credit score, the VA Home Loan is backed by the VA and allows more flexibility than many other loans. In fact, even for veterans with bad credit, the VA Home Loan offers a simplified, no money down mortgage option if the other loan criteria is met.
Credit Score Under 660? No Problem.
Contrary to what you may have heard, you can qualify for a VA loan with a credit score under 660. Different VA lenders have different credit score limits. We can help you secure your mortgage with a credit score as low as 620.
About the VA Home Loan Program
Created in 1944, the VA Home Loan Program was a way to say “thank you” to all the veterans and military members who served during World War II. Since that time, the program has continued to make home ownership easier, affordable and faster for both veterans and active duty military members. It’s exclusive only to veterans, service members and surviving spouses and has helped millions fulfill the American Dream of homeownership.
One of the many benefits is the ability to get a VA Loan with a credit score under 660, the score typically needed for a traditional mortgage.
Low Credit & No Credit Options
Many veterans and active duty members of the military find their credit suffers from time spent overseas or missed payments caused by multiple deployments. Thus, the VA loan is available for those with low credit scores or even no credit.
The VA has established broad requirements and guidance for military borrowers. For example, the VA Loan Guaranty program has no income requirements or credit requirements. Instead, the VA verifies a borrower is considered a satisfactory credit risk and qualification is determined by other factors, such as past payment history.
Do Some Lenders Require A Higher Score?
Since VA lenders ultimately issue the loans, they will also have their own unique requirements, especially when it comes to credit scores. Prospective borrowers have to satisfy both the VA and the lender’s guidelines in order to secure home financing. While some lenders may still require a credit score of 660, there are lenders, like 1st United, willing to approve VA Loans with a 620 credit score.
Other Factors That Impact Eligibility
Important factors considered in place of a high credit score includes payment history, debt-to-income ratio and a stable income. Late payments do not necessarily mean denial either as special circumstances are considered.
Additionally, bankruptcy or foreclosure won’t automatically disqualify you either. If it’s been at least 24 months since the event, some VA lenders are willing to approve financing. Stable income requirements also fall under a 24 month period, with lenders requesting documentation that verifies the income from the same employer and job type.
Ready To Apply?
If you have bad credit you may have been wondering, “Can I still get a VA loan?” The answer may be yes. We have worked with many homebuyers who had credit scores under 600. We also offer a credit rehabilitation program for those who don’t qualify today.
When you’re ready to learn more or apply, check out our client testimonials and then contact the VA loan experts at 1st United Mortgage to ensure your home buying experience is streamlined and stress free!