Do All Lenders Have The Same VA Credit Score Guidelines
One of the most common questions the team at Gustan Cho Associates often get is Do All Lenders Have The Same VA Credit Score Guidelines?
VA home loans offer a valuable advantage for eligible veterans and service members, offering the chance to become homeowners under favorable terms and conditions. However, regarding VA credit score guidelines in 2024, it’s essential to understand that not all lenders have the same criteria. This blog will shed light on the variation in credit score requirements among VA lenders and guide you in navigating the process effectively.
- Many of our viewers are often confused with the credit score requirements on VA loans.
- Many of our viewers research the basic VA agency lending guidelines by the Veterans Administration.
- The guidelines on the VA Agency Mortgage Manual specific state the VA does not have a minimum credit score requirement. However, they are often turned down from applying for a VA mortgage by lenders due to the minimum credit score requirements lenders have.
- Many are told by the lender that the minimum credit score requirements are 620.
- Others tell them the minimum credit score requirements are 640 to 660.
- Why are lenders requiring a minimum credit score requirement when the VA does not mandate a minimum credit score requirement?
Do All Lenders Have The Same VA Credit Score Guidelines: VA Agency Guidelines Versus Overlays
Lender overlays are mortgage guidelines that are created and implemented by individual lenders that are above and beyond the VA agency minimum credit score requirements.
- The bottom line is the VA does not have a minimum credit score requirements on VA loans
- As long as the borrower meets the minimum VA agency mortgage guidelines, the borrower can qualify for a VA loan with an approve/eligible per AUS
- If you are told by one lender that you do not qualify for a VA loan due to the lender’s minimum credit score requirements, go to a different lender with no lender overlays on credit scores
- Not all lenders have the same VA credit score requirements
- Most lenders have lender overlays on credit scores on VA loans
- However, there are lenders such as Gustan Cho Associates with no lender overlays on VA loans
- Gustan Cho Associates has no lender overlays on VA loans
- We just go off the VA Agency Mortgage Guidelines
- There are countless borrowers who have approved with credit scores in the 500’s on VA loans
- Over 75% of our borrowers at Gustan Cho Associates Mortgage Group are folks who could not qualify at other lenders due to their lender overlays
- As long as the borrower can get an approve/eligible per automated underwriting system and can meet the conditions, we will not just close on your VA loan but will close it on time.
Do All Lenders Have The Same VA Credit Score Guidelines? Click here to learn more.
Do All Lenders Have The Same VA Credit Score Guidelines During The COVID-19 Pandemic Economic Crisis
The coronavirus pandemic has shaken the mortgage industry.
- The COVID-19 Pandemic has shaken the secondary mortgage bond markets
- There was no demand for borrowers with under 700 credit scores
- Anyone with under 700 credit scores had a hard time qualifying for government and conventional loans
- Borrowers with under 700 credit scores were quoted high mortgage rates and had to pay discount points
- Most lenders instantly implemented lenders overlays on credit scores on VA loans
- Many lenders increased their minimum credit scores to 640 to 680 FICO on VA loans
- This holds true even though the VA does not have a minimum credit score requirement
The great news is Gustan Cho Associates is one of the very few lenders that did not increase credit score requirements on VA loans during the coronavirus pandemic economic crisis.
VA Minimum Agency Mortgage Guidelines
The VA has one of the most lenient mortgage guidelines than any other loan program. The following are the basic VA Agency Mortgage Guidelines on VA Loans:
- 100 financing with no down payment required on VA mortgages
- One to four-unit owner-occupant residential properties qualify
- Second homes and investment property financing is not eligible for VA loans
- No mortgage insurance premium required
- There is a two year waiting period after Chapter 7 Bankruptcy discharged date to qualify for VA loans
- There is a two year waiting period after foreclosure, deed in lieu of foreclosure, short-sale to qualify for VA mortgages
- Outstanding collections and charged-off accounts do not have to be paid
- Borrowers in Chapter 13 Bankruptcy repayment plan can qualify for VA loans one year into the payment plan with Trustee approval and manual underwriting
- There is no waiting period after Chapter 13 discharged date to qualify for VA loans
- Any Chapter 13 Bankruptcy discharge that has not been seasoned for at least two-years needs to be a manual underwrite
Gustan Cho Associates are experts in originating and funding VA mortgages. Contact us to qualify for a VA Loan, click here
Qualifying For A VA Loans With No Lender Overlays
VA loans are one of the best loan programs in the Nation, if not the best. VA mortgage rates are the lowest than any other loan program. VA rates are even lower than conventional mortgage rates. This holds true even though the VA does not require any down payment and offer 100% financing. There is no pricing adjustments on rates for the loan to value on VA loans.
If you are told that you do not qualify for a VA loan due to lender overlays on credit scores, please contact us at Gustan Cho Associates at 800-900-8569 or text us for a faster response. Or email us at gcho@gustancho.com. The team at Gustan Cho Associates is available 7 days a week, evenings, weekends, and holidays. Gustan Cho Associates is a national five-star mortgage company licensed in multiple states with no lender overlays on VA loans, other government loans, and conventional mortgages.
Frequently Asked Questions (FAQs)
- Q: Do all lenders have the same VA credit score guidelines?
A: No, lenders may have different credit score requirements for VA loans. - Q: What is the typical minimum credit score for a VA loan?
A: Most lenders prefer a credit score of at least 620 for VA loans. - Q: Are there lenders that accept lower credit scores for VA loans?
A: Some lenders may accept credit scores below 620, but they may have stricter requirements. - Q: Is it possible for me to meet the requirements for a VA loan with a poor credit history?
A: It’s possible, but it may be more challenging. Working on improving your credit is advisable. - Q: Do VA credit score guidelines change over time?
A: Yes, guidelines can change, so staying updated with current requirements is important. - Q: Are there any exceptions to VA credit score guidelines?
A: Lenders may make exceptions based on individual circumstances, but they are not guaranteed. - Q: How can I find a lender with VA loan options that match my credit score?
A: Compare offers from multiple lenders to find the best fit for your credit situation. If you’re having trouble finding a lender that matches your credit score, consider working with a mortgage broker. Mortgage brokers possess the ability to access a variety of lenders and assist you in locating one that aligns with your credit history.
