The United States Department of Veteran Affairs (VA) offers veterans, active servicemen, their families and survivors various benefits, including pension, education, disability compensation, and healthcare. Out of all the benefits extended by the government to honor the our service men and women, the most sought after is the VA home loan. Ironically, despite the fact that VA loans offer one of the easiest channels for veterans to obtain a home loan, many veterans do not understand the eligibility requirements to qualify. To help fill the void, below is a brief over view of VA loan eligibility guidelines and criteria.

Eligibility Criteria

For Veterans

• Should have served minimum 90 consecutive days of active service during wartime

• Or, should have served minimum 181 consecutive days of active service during peacetime

For Active Service Members

• Should be an active duty member who has served continuously for 90 days

For National Guard & Reserve Members

• Should have served in the National Guard or Reserves for more than 6 years

For Spouses

• Should be the spouse of a veteran who died while on duty or because of a service related disability

• Should be the spouse of a veteran who went missing during war or became a war prisoner

Other Requirements

Residual Income Requirement

Though there is no income threshold that borrowers must meet to qualify for a VA loan, the VA requires the applicants to have a stable residual income, to ensure that the borrower will be able to repay the loan after meeting their family’s basic cost of living. The amount of residual income varies depending on the family size of the applicant and the area they live in.

Credit Score Requirement

According to the VA loan guidelines, veterans and active military members do not require a specific credit score to apply for a VA loan. However, some lenders may still require a minimum credit score. While credit score requirements vary from lender to lender, in most cases, the minimum threshold is 620.

DTI Ratio Requirement

The DTI ratio is a ratio of the applicant’s outstanding monthly debts to the existing monthly income. This ratio that helps lenders analyze the payback capacity of an applicant. The lower the ratio, the more the probability of the applicant paying back the loan. You need to know that although VA prefers applicants with a DTI ratio equal to or lower than 41, some lenders allow higher DTI ratios.

For more information on getting pre-qualified for a VA home loan send us a request, apply online, or simply call us today!