Qualifying for a VA Home Loan
VA home loans are guaranteed by the U.S. Department of Veterans Affairs, so lenders must follow VA guidelines when originating and closing them. Because VA loan requirements differ from conventional loan guidelines, working with a lender experienced in VA financing makes it easier to qualify and to take full advantage of everything the program offers.
Qualifying for a VA loan comes down to four main areas:
Military Service
VA loan eligibility is based on your service history. Full-time active duty generally requires two years of service, while reserve duty requirements vary depending on the nature of your service. Your Certificate of Eligibility (COE) confirms your specific eligibility, and First Equity has direct access to the VA's system to request this on your behalf.
Credit
Since VA loans offer 100% financing, lenders look closely at your credit history to confirm your ability to manage the loan. There is no VA-set minimum credit score, but First Equity typically looks for a score around 620, with particular attention to your payment history over the past 12 months. Timely rent or housing payments carry significant weight. Bankruptcies and foreclosures generally need to be at least 24 months old, and outstanding collections or judgments may need to be resolved before closing. Give us a call and we'll review your credit with you directly, so you know exactly where you stand and what your options are.
Income
Qualifying also depends on stable income and a healthy balance between income and debt. Generally, total monthly debt should not exceed 42% of gross monthly income. VA loans also factor in residual income, the amount left in your budget after major expenses, which adds a layer of protection beyond the standard debt-to-income calculation. Income from part-time work, bonuses, or commissions can count toward qualification when it has a two-year history. Give us a call and we'll walk through your income and debts together, so you have a clear, specific picture of what you qualify for.
Collateral
The VA requires an appraisal by a VA-approved appraiser to confirm the home's value and condition. Beyond value, the appraiser checks for issues such as roof, furnace, or foundation problems. If any issues are found, additional inspections may be required before closing to confirm the home meets VA property standards. The best way to know exactly where you stand is to check your qualification below.