Veterans Affair Loan Credit Requirements
- You will need a minimum 620 credit score. Your middle score of the 3 reporting bureaus is determined as a score for qualification
- If using a co-borrower the lower of the two middle scores is used for qualification.
Minimum Down Payment for VA loans
- VA loans do not require a down payment
VA Seller Concessions
- The seller can contribute 4% of the purchase price to apply towards closing cost, pre-paids and other fees associated with a mortgage.
- There are certain non-allowables that cannot be paid by the VA borrower.
Funding Fee for Vet loans
- VA loans do not have a monthly mortgage insurance premium.
- VA loans do have an upfront Funding Fee which is financed into the loan. This amount is determined on the borrower’s VA eligibility.
Eligibility requirements for a VA loan:
- Veterans and active military personnel are eligible to participate in the VA loan program. Generally, you’re likely qualified if you served:
- 181 days during peacetime (Active Duty)
- 90 days during war time (Active Duty)
- 6 years in the Reserves or National Guard
- Some surviving spouses may be eligible
- All borrowers who apply for VA loan must supply or obtain a Certificate of Eligibility(COE) which states your VA Entitlement through the Department of Veteran Affairs. If you do not have your Certificate of Eligiblility then your loan officer can get it for you. Also, military personnel must provide proof of service.If the borrower is still serving on regular active duty, they must provide an original statement of service signed by, or by direction of, the adjutant, personnel officer, or commander of their unit or higher headquarters which identifies them and their social security number, and provides their date of entry on their current active duty period and the duration of any time lost.
- If the borrower was discharged from regular active duty after January 1, 1950, a copy of DD Form 214**, Certificate of Release or Discharge From Active Duty is required to be included with the fully completed VA Form 26-1880.If the borrower was discharged after October 1, 1979, DD Form 214 copy 4 should be included. A photocopy of the DD214 will suffice…an original document is not required.
- If the borrower was discharged from the Selected Reserves or the National Guard, they must include copies of adequate documentation of at least 6 years of honorable service. If they were discharged from the Army or Air Force National Guard, they can submit NGB Form 22, Report of Separation and Record of Service, or NGB Form 23, Retirement Points Accounting, or it’s equivalent.If they were discharged from the Selected Reserve, they can submit a copy of your latest annual points statement and evidence of honorable service. Unfortunately, there is no single form used by the Reserves or National Guard similar to the DD Form 214. It is the borrowers responsibility to furnish adequate documentation of at least 6 years of honorable service.
- If the borrower is still serving in the Selected Reserves or the National Guard, they must provide a an original statement of service signed by, or by the direction of, the adjutant, personnel officer, or commander of their unit or higher headquarters showing the length of time that they have been a member of the Selected Reserves. Again, at least 6 years of honorable service must be documented.
Debt to Income ratio is not capped but will be based on AUS Findings