Good evening Mr. Jackson,
This question is so relevant and timely especially I am currently working with two VA loan buyers looking to buy properties in the Greater Seattle and Eastside area
As a sign of the times, mortgage investors across the country have made it a requirement that a borrower have a 620 FICO score or higher to qualify for a VA loan. Now, this is not a change implemented by the VA Department â€“ this is something that mortgage investors (those who actually purchase note on the secondary market) have now enforced due to the elevated default risk associated for borrowers with sub-620 FICO scores.
Previously, no minimum FICO score requirements existed â€“ as long as the broker/lender received an approval through either Fannie Maeâ€™s or Freddie Macâ€™s â€œAutomated Underwriting Systemâ€ (AUS), the Veteran would be approved. Even if the broker/lender did not get an approval through an AUS, there was an option to do a manual underwrite in which a VA approved underwriter could approve a loan based on compensating factors and explanations of previous derogatory credit. The compensating factors would have to validate that the Veteran is worthy of credit approval â€“ and can meet the expected housing obligations. Back in March 2009 and manual underwriting is no longer allowed. The Veteran must get an approval from an AUS in order to qualify for a VA Loan.
If you would like to qualify for a VA loan but fall short of the 620 FICO requirement â€“ there are credit analysis tools that can help forecast your FICO score if certain actions are taken (like paying down debt or removing an incorrect late on a credit card). Feel free to contact me at 425.7531719 to learn more about how to access these tools. It may help provide a blueprint of what you may need to do to qualify in this constantly changing mortgage environment. Thank you for taking time to read. Have a sensational weekend :)