VA Home Loan Requirements

The VA Home Loan is great option when you need financing for a new home. Of course, the VA Loan is only available to veterans and active duty military, so regular lay folks aren't eligible for a VA Loan.

But just because you have been in the military, and provided you were discharged honorably if you are a veteran, there are still a few items to consider if you are actively pursuing obtaining a VA Loan.

Credit

The VA does not stipulate that a borrower must have a minimum credit score to qualify for a VA Loan, however most VA Lenders do and they look at the last 12 months of your credit history to ensure you've made timely payments and had few to no late payments. 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.

Occupancy

There is also an occupancy requirement for a VA Loan that the borrower obtaining the VA Loan make the home his or her primary residence. For refinance purposes, if a home has been purchased with a VA Loan, however the homeowner has been relocated, the homeowner is still eligible to obtain a VA IRRRL Refinance based on previous occupancy of the home. A homeowner planning to move into the home after purchasing within a "reasonable time" has 60 days to move into the home. However that time line can be exceeded if:

• The Veteran certifies that he or she will personally occupy the property as his or her home at a specific date after loan closing
• There is a particular future event that will make it possible for the veteran to personally occupy the property as his or her home on a specific future date.

VA generally does not consider occupancy at a date beyond 12 months after loan closing reasonable.

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, we've listed below what you can use a VA Loan for.

• 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.

For more questions about VA Home Loan Requirements, please contact us.