There are two ways to get a bad credit VA mortgage loans approved.
VA mortgage for people with bad credit uses auautomated Underwriting and Manual Underwriting. With AU, your lender will run your income your credit and assets through a program called desktop underwriting. From that, you will get back, an approval, denial or a refer. A refer means that the loan qualifies for a VA manual underwrite approval. When qualifying for a bad credit VA home loan manual approval, the VA will look for compensating factors to compensate for your low scores and past negative credit history. the three main compensating factors that VA looks for is. Those are....
No Late Payments or
No Late Payments or Collections for 1 year
Low debt to income ratio (Below 45%)
Long-term employment
liquid assets (Stocks, Bonds, 401k, Savings)
Sizable down payment
Military benefits
1 Year Satisfactory home ownership experience
High residual income
Tax credits for child care
Tax benefits of home ownership
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