VA home loan questions and answers

Written by Bill MacDonaldSeptember 14th, 20223 minute read

9. Can a veteran get a VA loan with bad credit?

The VA home loan is available through VA-approved lenders. The Veteran's Administration does not require a minimum credit score. The VA allows the lender to decide whether the credit history is acceptable or not.

Here's what the VA says about (bad) credit:

The applicant's past repayment practices are the best indicator of his or her tendency to repay future obligations.

The applicant's overall payment patterns, rather than specific instances of bad repayment, should be scrutinized.

Determine if the applicant (and spouse, if applicable) is an acceptable credit risk based on a comprehensive review of the credit report and other credit data.

In non-bankruptcy circumstances, acceptable credit is generally considered restored after the veteran, or veteran and spouse, has made satisfactory payments for 12 months after the last negative credit item has been satisfied.

Assume a credit report reveals a lot of past-due collections, some of which have been outstanding for many years.

After the borrower has completed the obligations and made regular payments on future commitments for at least 12 months, satisfactory credit is restored.

Source: VA Pamphlet 26 - 7, Revised Chapter 4: Credit Underwriting

10. Can a lender charge points on a VA loan?

On a VA loan, lenders are allowed to impose mortgage points.
Mortgage points may be paid in order to lower the yearly interest rate.
VA lenders may impose an origination fee as well.

11. Can a member of the national guard get a VA loan?

Yes. National Guard members are able to apply for a VA loan, provided the vet meets the eligibility requirements.

12. Can a VA loan be denied?

A VA loan can be denied. The veteran must meet the usual mortgage requirements for approval. Length of employment, credit quality, and income are all considered with the mortgage application.

13. Can a VA loan be for 15-years?

The Veteran's Administration permits 15-year loan terms. See today's VA 15-year interest rates

14. Can a VA loan be used for a duplex?

Unfortunately, the VA home loan cannot be used for the purchase of a duplex. single-family, owner-occupied homes only.

15. Can a VA loan be used for a rental property?


16. Can a VA loan be used for new construction?

The VA home loan can be used for the construction of a single-family home.

17. Can a VA loan be used on a second home?

Second homes are not eligible for a VA mortgage.

18. Can a VA loan be used to refinance?


19. Can a buyer pay closing costs on a VA loan?


20. Can closing costs be added to a VA loan?


21. Can I get a jumbo VA loan?

The VA does not limit the loan size, lenders do. However, the lender may require a down payment if the guarantee percentage is less than 5%. See VA loan calculator

22. Can I get a VA loan after bankruptcy?

Here's what the VA says about bankruptcy:

The existence of a bankruptcy in an applicant's (or spouse's) credit history does not automatically rule out the loan.

Gather as much information as possible about the bankruptcy's facts and circumstances.

Think about why you're filing for bankruptcy and what kind of bankruptcy you're filing.

Bankruptcy filed under the Bankruptcy Law's Straight Liquidation and Discharge Provisions.

A bankruptcy dismissed more than two years ago may be ignored.

Source: VA Pamphlet 26 - 7, Revised Chapter 4: Credit Underwriting

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