VA Loan Requirements
The requirements for a VA loan are minimal. You do not need to make a down payment or have a specific credit score. You do not have to pay mortgage insurance. You do have to have a credit history of no late mortgage payments within the last 12 months. You also need a Certificate of Eligibility from the VA, which you can get through the U.S. Department of Veterans Affairs.
The Veterans Administration makes mortgage loans available to U.S. veterans who meet the VA Loan guidelines. The VA does not act as a lender, but does guarantee the loans, making it more desirable for lenders to make loans to veterans. Because the VA loan requires no down payment and no minimum credit score, it offers many veterans with poor credit or limited resources the opportunity to become homeowners. While the VA credit score requirement is never an issue, other factors can make buying a home difficult for people with low FICO scores.
Lender Requirements for VA Loans
Lenders do not have to follow the VA credit score requirement of no minimum credit score. In fact, they typically require a credit score of 620 or higher. Yet, there are lenders who accept loan applicants with lower scores. The key to successfully purchasing a home with a lower credit score is to find the right lender who will work with you to help you accomplish your goal of owning your own home.
Getting a VA Loan with Bad Credit
If your credit score is below 620, you may still be able to get a VA loan with bad credit. To do this most easily, you typically still need to meet the following three qualifications:
- Have no debts in collections.
- Have no outstanding judgements against you.
- Have a steady income.
If your poor credit is due to an unusual set of circumstances and you have since resumed making timely bill payments, you may be considered if you can give a reasonable explanation for your low credit score. Because there are no VA loan guidelines that require a certain credit score, it is up to the lender’s discretion to decide whether to extend the loan or not.
Finding the Right VA Lender
If you have never bought a home before or never bought using a VA loan, finding the right lender on your own can seem next to impossible. You need a reputable lender who knows how to overcome bad credit and work with the Veterans Administration to secure your home loan. A lender who is attentive to the needs of veterans wants to extend credit to as many veterans as possible, acknowledging that the lack of a specific credit score VA loan requires was chosen for to help veterans who have different challenges than others buying homes.
You can easily talk to lenders and compare VA home loan offers by filling out the form on our home page.