Being a veteran, military officer, or surviving spouse, fulfilling your dream of homeownership will not be daunting for you even if you have a low credit score. Why? It is because a VA loan is there at your rescue. Guaranteed by the United States Department of Veterans Affairs, a VA is a specially designed home loan programs for military people. The VA recognizes the sacrifices of veterans and active duty borrowers when it considers making loans for them with bad credit.
As the loan is backed by the VA, the lenders approve the easily despite having a low credit score. Just apply for one of the best VA loans for bad credit in Houston and get approval. But you need to know a few important things. Here are these –
No minimum credit score
The VA does not have a minimum credit score requirement. Instead, they look at your payment history, especially the last 12 months of your rent or mortgage payments. Proof or explanations of active-duty deployments or disability-related health challenges for veterans would be sufficient to overcome a poor credit payment history.
Use bankruptcy or credit counseling plan payments to qualify
In case, right now, you are making payments as part of a Chapter 13 bankruptcy plan or credit counseling program and can document 12 months of on-time payments, you may be able to get a new VA loan.
Only a 24-months waiting period after Chapter 7 bankruptcy
Even if you are making only 0% down payments, you may be eligible to get a mortgage after bankruptcy if it has been more than 2 years. That compares with a four-year waiting period for traditional loan programs. Make sure you have all of your bankruptcy papers and a copy of the discharge so the lender can verify the date. The VA is sensitive to service-related issues, which may lead to a bankruptcy filing.
If you have had a foreclosure, the same two-year rule is applicable
The waiting period after a foreclosure will be the same as a bankruptcy. In this case, the benefit is even better – there can be a seven-year waiting period for traditional loans. In case you have paperwork related to the actual date the foreclosure was completed, be sure to have it handy. The lender will need to confirm the date and the public records are not always accurate when it comes to determining the final date a foreclosure was completed.
Getting a VA loan with a VA foreclosure
If you had a foreclosure on a VA loan in your past, you may be eligible to get a new VA loan, even if eligibility has not been reported.
The VA does not have any credit requirements. However, there are other aspects of credit history that they focus on. It includes your most recent 12 months of payment history, rent and mortgage payment history, your CAIVRS history, and more. So, you should consider these things to get a VA loan approval with bad credit.