According to a recent report posted on SunSentinel, “A landmark achievement got lost amid the government shutdown last month: A record-breaking year for the VA home loan program. The Department of Veterans Affairs backed nearly 630,000 mortgages in the fiscal year ending Sept. 30, an all-time high for a benefit borne of the original GI Bill. VA loan volume has tripled since 2007, driven by low interest rates and tighter lending requirements that have squeezed veterans and military families.

The report further highlighted how many of these veteran borrowers do not qualify for conventional mortgage loans.  So a veteran borrower still has options to avail the distinct advantages of VA mortgage loan without having a high credit score. Unlike conventional home mortgage loans, VA loans are guaranteed by the VA. The guarantee protects lenders from incurring any loss, in case the borrower fails to pay back the loan. So the lenders always evaluate a VA loan application without referring to the conventional lending terms and standards.

The VA income and credit standards also differ from general consumer credit standards. The VA credit standards does not emphasize of the credit history of the veteran borrower. So a borrower, who is not meeting the general consumer credit standards, is still eligible for a VA mortgage loan. However, he must meet the other requirements to avail a VA home loan. Also, the borrower has to choose from the lenders who participate in the VA lending program. In other words, he has to apply for the loan with a bank, mortgage company or credit union approved by VA.

At the same time, the borrower also needs to obtain Certificate of Eligibility from the VA. The certificate will indicate his eligibility to apply for a VA home loan. However, the lenders who have access to the Web LGY system can apply for the Certificate of Eligibility on behalf of the customer. However, the borrower is also required to provide documentation for payments made towards various expenses like rent, insurance and utilities. The lender will use the payment records as the base to establish credit history of the borrower by creating credit analysis report. These simple criteria also contribute towards helping more veteran borrowers to avail VA loans despite not qualifying for conventional financing.

 


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