Credit Requirements

2016 VA Credit Requirements are many times misunderstood, mainly because there are essentially two sets of VA guidelines. There are the guidelines that VA publishes, which are the “official” guidelines, but then there are the lender’s guidelines.

The difference is that all lenders have “overlays,” or additional guidelines above and beyond what VA requires. For example, VA guidelines will state that VA IRRRL refinances do not require and appraisal, but in reality, most lenders do require some form of an appraisal. VA will also state that there is no minimum credit score on Appleton VA Loans, but most lenders have a 620 minimum credit score.

Here is a summary of some of the basic credit requirements for Appleton VA Loans. If you need additional help, we would be honored to give you a no obligation consultation to help you understand if you qualify for a VA loan.

The applicant must have a credit history which indicates a reasonable ability and willingness to meet obligations as they become due. Any or all of the following are indicators of an unacceptable credit history unless the cause of the problem was beyond the applicant's control:

• Incidents of more than one debt payments being more than 30 days late if the incidents have occurred within the last 12 months. This includes more than one late payment on a single account.

• Loss of security due to a foreclosure if the foreclosure has occurred within the last 36 months.

• Outstanding tax liens or delinquent Government debts with no satisfactory arrangements for payments, no matter what their age as long as they are currently delinquent and/or due and payable.

• A court-created or affirmed obligation (judgment) caused by nonpayment that is currently outstanding or has been outstanding within the last 12 months.

• Two or more rent payments paid 30 days or more past due within the last 3 years.

• Accounts which have been converted to collections within the last 12 months (utility bills, hospital bills, etc.).

• Collection accounts outstanding, with no satisfactory arrangements for payments, no matter what their age as long as they are currently delinquent and/or due and payable.

• Any debts written off within the last 36 months.

The following will not indicate an unacceptable credit history:

• "No history" of credit transactions by the applicant.

• A bankruptcy in which applicant was discharged more than 36 months before application.

• A satisfied judgment or foreclosure with no loss of security which was completed more than 12 months before the date of application.

Mitigating circumstances to establish the borrower's intent for good credit when the applicant provides documentation that may be considered if:

• The circumstances were of a temporary nature, were beyond the applicant's control, and have been removed (e.g., loss of job; delay or reduction in government benefits or other loss of income; increased expenses due to illness, death, etc.); or 

• The adverse action or delinquency was the result of a refusal to make full payment because of defective goods or services, or as a result of some other justifiable dispute relating to the goods or services purchased or contracted for.

We would be happy to take a look at your credit and advise you as to whether you can qualify to purchase a home or refinance. We will provide you a free, professional copy of your credit report, and will give you honest advice and straight answers. If you don’t qualify now, we will give you tips on how to improve your credit. Give us a call today!

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NEXA Mortgage, LLC | Appleton 920-858-1203
Gwenn Tanvas
WI - Wisconsin
120 N Morrison Street, Ste. 101-G
Appleton, Wisconsin 54911
P: 920.858.1203

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