How to qualify for VA Loans with Bad Credit

1. How To Qualify For VA Home Loans Bad Credit And Low Credit Scores

* Most veteran home buyers looking to get qualified for VA Home Loans Bad Credit and Low Credit Scores do not realize that the U.S. Department of Veteran Affairs (VA Home Loans) do not have a minimum credit score requirement.

- VA also does not have a maximum debt to income ratio caps
- Reason why veteran home buyers often ask what is the minimum credit scores required is because most lenders have their own credit score requirements that is called lender overlays
- Most lenders require 620 to 640 credit scores
- They also have maximum debt to income ratio requirements of 45% to 50%
- Gustan Cho Associates Mortgage Group at Loan Cabin Inc. are direct lenders with no overlays on VA Loans
- Gustan Cho Associates Mortgage Group do not have minimum credit score requirements on VA Home Loans Bad Credit
- Gustan Cho Associates Mortgage Group does not have maximum debt to income ratio caps on VA Home Loans
- As long as veteran borrowers gets an approve/eligible per Automated Underwriting System findings, we just go off the AUS

2. Key In Getting Approve/Eligible Per Automated Underwriting System

* As mentioned in earlier paragraphs, Department of Veteran Affairs does not require credit scores nor debt to income ratio requirements.

- However, borrowers do need to get an approve/eligible per Automated Underwriting System unless the VA Loan is a manual underwrite
- Veteran Borrowers can get an automated approval on VA Home Loans bad credit
- They do not have to pay off outstanding collections and charged off accounts to qualify for VA Home Loans with bad credit
- However, AUS does frown upon the fact if bad credit does continue after a prior isolated incident of have prior bad credit

3. FHA Versus VA Home Loans Bad Credit

* VA has much more lenient credit requirements than other loan programs.

- For example, waiting period to qualify for VA Home Loans after housing event (after foreclosure, deed in lieu, short sale) when the waiting period is three years on FHA Loans
- However, FHA is much more lax when it comes to outstanding collections and charged off accounts
- If veteran borrowers cannot get an approve/eligible per AUS Findings to large amounts of collections and charged off account, loan officer can see if they can run AUS for a FHA AUS Approval
- Veteran home buyers can get an FHA Loan and refinance with a VA Loan at a later date

Home buyers who need to qualify for VA Home Loan Bad Credit with direct lender with no mortgage overlays, please contact us at Gustan Cho Associates Mortgage Group at 262-716-8151 or text us for faster response. We are available 7 days a week, evenings, weekends, and holidays.

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