Understanding the eligibility requirements of a VA loan
The Veterans Administration provides guidance to companies that originate and fund VA loans.
In this post, we'll touch on four basic requirements that lenders will use when considering a VA loan applicaiton.
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Borrowers must have enough “entitlement” available to be considered for a VA loan. This term is used to refer to the amount the VA will guarantee for a particular borrower. If it’s deemed that you have full entitlement, you can qualify for a loan of up to $424,100.
You may be eligible if you meet one or more of the following conditions:
You have served 90 consecutive days of service during wartime.
You have served 181 days of service during peacetime.
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You have more than 6 years of service in the National Guard or Reserves.
You are the spouse of a service member who died in the line of duty or as the result of a service-related disability.
Every situation is unique. Reach out to one of our VA Loan experts today to confirm your eligibility.
VA borrowers are expected to live in the properties they purchase.The issues that bring up occupancy compliance problems with the VA all the time are deployments and change of station orders.
If the home is your permanent residence and you're overseas on a "contingency basis" such as a TDY, deployment, etc, the VA would consider you an owner/occupier regardless of the fact that you have been deployed.
Spouses and dependent children (under qualifying circumstances for the children) do meet the VA loan occupancy requirement in any case.
Income & Credit Requirements
VA borrowers and joint co-borrowers must have adequate income to cover the repayment of the mortgage and satisfactory credit.
Lenders are given some latitude to determine if the borrower is a safe credit risk within the guidelines provided by the VA and may establish their own credit score minimums, but the VA reccomends that successful candidates have no more than a 41% debt-to-income ratio and enough continuing income to pay for typical living expenses.
If you are applying for a VA Streamline refinance loan, no income documentation or ratio calculation is required.
Minimum Property Requirements
When you are home shopping, you have a wish list. You've probably nailed down the number of bedrooms, bathrooms and garage bays. Maybe you've refined the list to a cul-de-sac or scenic surroundings, narrowed it down to a gourmet kitchen, home office, full basement or a host of other requirements.
The VA also has a list of requirements for a home. Its list is aimed to protect the buyer against unexpected, and usually expensive, surprises. The agency uses Minimum Property Requirements (MPRs), a series of standards that a home must pass in order to qualify for a VA loan. These MPRs ensure that the home is safe, sanitary and secure enough for borrowers to call their permanent home.
Other qualifications may or may not apply, but when the above basic loan approval requirements are covered, the applicant will usually qualify for their VA loan. Of course, loan amounts will vary according to each applicant's entitlement and ability to pay. Contact us for more information about VA-guaranteed loans and start the process with the least complicaitons.
We don't place you into a loan profile formula created by the banking industry. We'll take the time to listen to your individual needs to find the best funding solutions. Call 866-220-0301 or send us an email.
Ready to apply? Start the process.
Veterans can earn homebuying advantages like $0 down and lower payments. To turn your service into savings, apply now ⇒