What Are the VA Income & Credit Standards to Get a VA Home Loan?


The office of Veterans Affairs (VA) issues VA-funded home loans to veterans who qualify. A veteran's income and credit history are evaluated to determine whether the applicant is eligible for a VA loan. A lender analyzes a veteran's income stability, 12-month credit report, and debt-to-income ratio to verify loan eligibility. Lenders often use automated systems to help with the evaluation process.

Income Guidelines

  • A lender uses a residual income calculation to determine whether a veteran has enough income to qualify for a VA loan. General housing expenses, taxes, credit payments and daily living expenses are calculated and subtracted from the veteran's total income. A lender calculates the veteran's debt-to-income ratio and determines whether there are sufficient remaining funds to cover a home mortgage. The veteran's loan amount, within government limits, is determined by the debt-to-income ratio. According to Mortgage Underwriters, the necessary debt-to-income ratio for a VA-funded loan is 31/41 or approximately 41 percent.

Credit History

  • A veteran's credit history is evaluated by a lender to determine creditworthiness. VA-funded loans do not have specific minimal credit score guidelines, but a lender evaluates the veteran's previous 12-month credit history. VA loan eligibility requires a veteran to have a clean 12-month credit history with no late or default payments.

Liability Limits

  • According to VA Loans, in 2011, the VA loan liability limit is $417,000 per property purchase. In populated areas with high cost of living indexes, that limit increases to $625,000. A veteran must consult a mortgage lender to determine the exact limits within his region. According to the United States Department of Veteran Affairs, it is possible that a veteran's income level and debt-to-income ratio would allow him to purchase a home exceeding those limits, but the VA is only liable for the listed maximum amounts.

Income Stability

  • Income stability is a crucial factor in a veteran's VA-funded home loan qualification. VA Loans states that pay stubs for the previous 30 days or the most recent "Leave and Earning Statement" is required as part of the application process. In addition, the veteran's W-2s for the last two years must be submitted. Bank statements for the previous two months are required.

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