VA Home Loan Requirements for Credit Scores

If there’s one thing most buyers know about VA loans, it’s that they are the best way for veterans of the United States military to purchase a home with no money down. But one thing that isn’t always understood is the relationship between VA loans and credit scores (also known as FICO scores).

We receive a lot of questions regarding VA loans, but without a doubt one of the most common is, “What are the VA home loan requirements for credit scores?” Veterans who are interested in buying a home with VA loan financing want to know if their credit scores will be sufficient, or if they (like home buyers using the FHA program or taking out a conventional loan) will need to  raise their credit to meet a minimum threshold in order to purchase a home.

For those veterans, we have some very good news: At Wholesale Capital Corporation, there are no VA home loan requirements for credit scores. Other federal loan programs, such as the FHA loan, require a minimum credit score of 580. For conventional home loans that are not backed by the federal government, the minimum credit score is 620; in fact, some mortgage lenders actually have an even higher minimum score requirement. But because we believe U.S. military veterans have proven their character by serving, the lenders at WCC do not require VA borrowers to uphold a minimum FICO score.

But please note: “at WCC” is the operative term here. Wholesale Capital Corporation does not require VA loan borrowers to maintain a minimum credit score, but many other lenders do. Some will require VA borrowers to have a FICO score of at least 580, or even 620. So if you are a military veteran looking to buy a home and you have a compromised credit score, rest assured that our VA home loan requirements do not include a minimum FICO score in order for you to be eligible.

What Do We Require? 

Of course, that doesn’t mean there are no requirements for VA loan borrowers at all. VA loan borrowers do have to meet certain prerequisites in order to qualify. At Wholesale Capital Corporation, our VA home loan requirements include:

Proof of service. In order to qualify for a VA loan, military veterans must show their Certificate of Eligibility (COE). For active duty and current service members, this certificate can be obtained after a Statement of Service document is signed by the appropriate military personnel. Discharged and retired service members, as well as surviving military spouses, have separate requirements for obtaining the certificate; they should ask their loan officer what is required.

Stable income. All home buyers must show proof of income as evidence that they can make their mortgage payments, and VA home loan requirements are no exception. For VA borrowers, income may be derived from the following sources: verified employment, retirement income, Social Security, VA Disability, Basic Allowance for Housing (BAH), Basic Allowance for Subsistence (BAS), documented child support payments, documented alimony payments, or (for surviving spouses), Dependency and Indemnity Compensation (DIC). Employment is the preferred income source, but these additional sources are also eligible to be included in the applicant’s income.

Closing costs at the expense of the borrower. VA borrowers are required to pay the following closing costs for their loan: appraisal, origination fee, recording fee and survey. Your loan officer can estimate these closing costs for you. Please note, there may not always be an origination fee; ask your WCC loan officer for more information.