What is the Minimum Credit Score for a VA Loan?
Contents
Learn about the minimum credit score for a VA Loan and how to get a VA Loan with a low credit score.
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Introduction
For those looking to take advantage of the many benefits of a VA loan, one of the first questions they often ask is, “What is the minimum credit score for a VA loan?” While the answer isn’t as straightforward as you may hope, we’ve got you covered with everything you need to know about VA loan credit score requirements.
What is a VA Loan?
A VA loan is a mortgage loan that is guaranteed by the U.S. Department of Veterans Affairs (VA). The loan is available to veterans, active duty service members, reservists, and certain surviving spouses. The VA loan program was created to help veterans and other eligible borrowers purchase homes with favorable terms.
Who is Eligible for a VA Loan?
In order to qualify for a VA loan, you must be a current or former member of the U.S. military, have served for at least 90 days during wartime, or have served for at least 181 days during peacetime. You must also have a good credit score, which is defined as a FICO score of 620 or higher.
The Minimum Credit Score for a VA Loan
For those who are eligible, VA loans are one of the best ways to finance a home. But what is the minimum credit score for a VA loan?
The answer depends on a few factors, including the lender you use and the type of loan you’re applying for. Some lenders may have stricter requirements than others, but in general, the minimum credit score for a VA loan is 620.
However, if you have a lower credit score, there are still options available to you. For example, some lenders may be willing to work with you if you have a cosigner with a good credit score. Or, you may be able to get a VA loan with a lower down payment.
If you’re not sure whether or not you meet the minimum credit score requirements for a VA loan, the best thing to do is talk to a lender. They’ll be able to tell you what options are available to you and help you get started on the loan process.
Factors That Determine the Minimum Credit Score for a VA Loan
There are a few factors that come into play when determining the minimum credit score for a VA loan.
First, the lender may have an overlay, which is a set of additional guidelines that are above and beyond those set by the VA. For example, some lenders may require a minimum credit score of 620.
In addition, the type of loan you’re applying for will also play a role. For example, if you’re looking for a VA streamline refinance loan, you may only need a 580 credit score. However, if you’re looking to get a new VA purchase loan, you’ll likely need at least a 620 credit score.
Keep in mind that even if you meet the minimum credit score requirements set by the VA or your lender, it’s still important to have strong credit habits. That means paying your bills on time and keeping your debt-to-income ratio low.
Conclusion
A VA loan is a mortgage that is backed by the US Department of Veterans Affairs. These loans are available to eligible veterans, active duty service members, and their families. VA loans offer a number of benefits, including no down payment, no private mortgage insurance (PMI), and flexible credit requirements.
The minimum credit score for a VA loan is 580. This is the lowest credit score required by any mortgage program. VA loans are available to borrowers with a variety of other credit scores as well, including 620, 660, 700, and 720+. However, borrowers with credit scores below 580 will need to put down a 10% down payment. Borrowers with credit scores above 720 will receive the best interest rates on their loans.
If you are interested in applying for a VA loan, you can contact a variety of lenders who offer these loans. You can also visit the Department of Veterans Affairs website for more information on eligibility requirements and the application process.
