VA
Credit Requirements
Essentials
– Minimum credit score of 580 for all borrowers
– All loans must be underwritten by Fannie Mae or Freddie Mac’s automated underwriting system
– Any derogatory credit history will require additional underwriting review
– Mortgage rating must reflect any derogatory history in the last 12 months
– Credit report for non-borrowing spouse must be pulled in community property states with any debt included in qualifying ratios
Derogatory Event | Guideline |
|---|---|
Bankruptcy — Chapter 7 | 2 years from discharge date |
Bankruptcy — Chapter 13 | Minimum 12 months on time payments and court approval for new credit |
Foreclosure | 2 years from title transfer |
Deed-in-Lieu of Foreclosure | 2 years from title transfer |
Pre-foreclosure/Short Sale | VA does not consider a pre-foreclosure/short sale the same as foreclosure Written explanation and supporting documentation from borrower Underwriting to consider the reason for the pre-foreclosure/short sale and the credit history before and after the event |
Consumer Credit Counseling | Minimum 12 months on time payments and counseling agency approval |
Collections | Borrowers with a history of collections must have a current satisfactory credit history for at least 12 months Collections to be paid at underwriter’s discretion |
