How Do I Qualify for a VA Loan?


Qualifying for a VA Loan

Qualifying for a VA loan is simple.  There is no set minimum credit score or debt-to-income ratio requirements.  Generally, the lenders will set the terms, but it is easier to qualify for a VA loan than any other type of loan.  Most lenders will want to see a minimum credit score of 620.

What is a VA loan?

VA loans are for eligible service members and is a great loan product for a member or former member of the armed forces.  The US Department of Veterans Affairs guarantees VA loans.  The greatest aspect of a VA loan is that the loan requires zero down.  A small funding fee, which is generally anywhere from 2.15% to 3.3 percent, depending on the branch served.

No Mortgage Insurance Premium

The biggest benefit of a VA loan is no monthly mortgage insurance premium. The average annual mortgage insurance premium is 0.85% of the total loan amount.  This is paid in monthly installments.  This results in a big savings.

No Down Payment VA Loan

A first time funding fee for members of the Army, Navy, Air Force, or Marines is 2.15% and 3.3% for second use. A member of the Reserves or National Guard pays a funding fee of 2.4% for first use and 3.3 percent for second use.  First use means the first time a veteran obtains a VA loan and second use is subsequent to the first VA loan.  The funding fee does not need to be paid upfront and can be rolled into the loan.


First, there is no funding fee for an exempt veteran.  An exempt veteran is a veteran who suffers from a service related disability.  Additionally, the service member has been deemed to be disabled by the Department of Veteran Affairs.  Furthermore, a disabled borrower can also be exempted from property taxes.


You can obtain a VA loan with collections.  It is generally  up to the lender to determine what is acceptable and what isn’t.  Additionally, some lenders may require you to pay off the collections, while other lenders may be ok with them depending on the age and nature of the collection account.  Medical accounts do not need to be paid.  In some cases, the sum of the total collections will be added together.  Then a percentage of the collections will be added as a monthly debt and added to the debt-to-income ratio.

Late Payments

Consequently, if you are qualifying for a VA loan, you cannot have any late mortgage payments within the last 12 months.   There may be an allowance for one lay payment depending on the circumstances but the general rule of thumb is no late payments on mortgages.  If you are planning to use a VA loan to purchase your next property, you want to be sure that you make all of your mortgage payments on time.


About the Author: Arlene Disessa is a senior writer for California Loans with Gustan Cho Associates in the Greater Sacramento, California area, including Placer County, and the cities of Rocklin, Roseville, Granite Bay, El Dorado Hills, and Auburn.  Call Us today at 530.813.0661 or email at  Arlene Disessa is available 7 days a week to answer your questions.  Do you have bad credit? Call Us today on ways you can improve your credit score and qualify for a mortgage loan. For more useful information visit

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