Qualifying for a VA Home Loan (2024)

FAQs

What makes me eligible for VA loan? ›

VA loan eligibility

You are on active duty and have served 90 continuous days. You are a veteran who meets length-of-service requirements, which generally are 90 days in wartime and 181 days in peacetime. You completed 90 days of active-duty service or six creditable years in the Selected Reserve or National Guard.

At least 90 days of active-duty service including at least 30 consecutive days (your DD214 must show 32 USC sections 316, 502, 503, 504, or 505 activation), or. 6 creditable years in the National Guard and you were discharged honorably or placed on the retired list.

At a minimum, the home must be safe, sound, and sanitary with a good foundation, structure, and roof. The appraiser will also look for basic requirements like clean water, heat, power, and no health hazards. Any home with pests, mold, rot, or broken windows will not pass muster.

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

On a salary of $36,000 per year, you can afford a house priced around $100,000-$110,000 with a monthly payment of just over $1,000. This assumes you have no other debts you're paying off, but also that you haven't been able to save much for a down payment.

The VA home loan program doesn't have minimum or maximum income limits. But your mortgage lender will review your personal income to determine how large of a monthly payment you can afford. They'll also review your employment record to make sure you have a steady job and income source.

VA lenders typically require a FICO score of at least 620. High loan amounts, such as those exceeding $1 million, may require a higher credit score. Some lenders may approve lower scores, but it's common for these borrowers to face additional financial scrutiny and requirements.

Appraisers must note any damage caused by termites, wood-destroying insects, pest infestation, dry rot or any other defects that cause structural issues with the home. The appraiser must look for issues that could make the home less stable and/or put the occupants in harm's way.

Red flags include the presence of radon gas, asbestos or lead-based paint within the home, or properties located in a flood zone, near a sinkhole, or proximity to any type of environmental contamination.

One of the primary reasons some sellers may hesitate to accept a VA loan is due to misconceptions about the program. Some sellers believe that VA loans involve more red tape, delays, or stricter inspection requirements compared to conventional loans. In reality, VA loans are not as cumbersome as they may seem.

Why do sellers refuse VA loans? ›

In most cases, the refusal of the seller to offer VA financing stems from the listing agent making possible false comments to the seller, or creating a cost fear for the seller, stating “…it will cost you more if the buyer uses their VA eligibility…” or say “it will require you to make certain repairs…”

VA lenders make money by approving loans, not denying them so they'll do what they can to get your approval. When they can't, they'll send what is called an Adverse Action notice. This is an official form and required by law to provide you with a written explanation of why your loan was not approved.

Minimum service required for a VA mortgage

VA home loans are available to active-duty service members, veterans (unless dishonorably discharged), and in some cases, surviving family members. To be eligible, you need to meet one of these service requirements: You've served 181 days of active duty during peacetime.

The buyer is typically responsible for paying for things like the VA funding fee, loan origination fee and more. However, the seller might be able to contribute; they can pay closing costs up to 4 percent of the total home loan price. Your lender might also pay some of the closing costs, such as attorney's fees.

Current Income:

For those on a salary or working on an hourly basis for an employer, the underwriter looks at the most recent 30 days of income to determine what's available/eligible for qualifying.