VA Mortgage Loan Requirements

What are the VA Mortgage Loan Requirements?
To decide if you qualify for a VA Mortgage Loan, we will look at:

• Your income and your monthly expenses. VA uses two methods for income qualification purposes. The primary method of evaluating a veteran's income is the residual income method and a 41% total debt to income ratio.
• Your credit history (this is important, but VA's credit standards are flexible). A FICO score of 620 or above is very helpful in obtaining an approval.
• Your overall pattern rather than to individual problems you may have had.

VA uses two methods for income qualification purposes. The primary method of evaluating a veteran's income is the residual income method. Under this method, the underwriter determines that a veteran has sufficient income to cover day-to-day living expenses after paying housing expenses, taxes, and other debts such as car payments and credit card payments. VA also uses a debt-to-income ratio method like many programs. However, VA uses only one ratio (41%) which is the ratio of total debt (both housing and other debt) to income.

Additionally, to meet current VA loan qualifications your military service must meet the following requirements:

Military Service Requirements for VA Loan Eligibility:

Note:  Applications involving other than honorable discharges will usually require further development by VA.  This is necessary to determine if the service was under other than dishonorable conditions.

Wartime - Service During:

You must have at least 90 days on active duty and been discharged under other than dishonorable conditions.  If you served less than 90 days, you may be eligible if discharged for a service connected disability.

Active Duty Service Personnel

If you are now on regular duty (not active duty for training), you are eligible after having served 181 days (90 days during the Gulf War) unless discharged or separated from a previous qualifying period of active duty service.

Selected Reserves or National Guard

If you are not otherwise eligible and you have completed a total of 6 years in the Selected Reserves or National Guard, you are likely eligible.

You may also be determined eligible if you:

• Are an unmarried spouse of a veteran who died while in service or from a service connected disability, or
• Are a spouse of a serviceperson missing in action or a prisoner of war

Eligibility may also be established for:

Can I get a VA Mortgage Loan after Bankruptcy?
Criteria for VA loan approvals state that if you have been discharged from a Chapter 7 bankruptcy for two years or more, you are eligible to apply for a VA mortgage. If you are in a Chapter 13 bankruptcy and have made all court approved payments on time and as agreed for at least one year, you are also eligible to make a VA loan application.

What are the VA Down Payment Requirements?
VA loans have no down payment requirement up to $417,000 in most counties in the U.S..

What is the maximum amount that I can borrow?
The maximum amount for a VA Mortgage Loans are determined by:

Maximum loan amount: By law, VA cannot insure loans that exceed certain amounts based on the metropolitan area or county in which you live. The highest maximum VA home loan right now is $1,094,625. The lowest maximum amount available in any county is $471,000. To see what the limit is in the county in which you're interested, visit the following site http://www.homeloans.va.gov/docs/2009_county_loan_limits.pdf. This site lists U.S. territories as well as states.

Maximum financing: The maximum VA Mortgage amount will be 100% of either the appraised value of the home or its selling price, whichever is lower.

Are VA Home Loans Assumable and can they be Refinanced?
One of the greatest advantages of ENG Lending's VA Home Loans is the ability for the loan to be assumed by another qualified veteran. A VA Home Loan are also eligible for VA Streamline Refinancing with an VA IRRRL Loan, offering a lower than standard interest rate.

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