What Do I Need To Qualify For A VA Bad Credit Loan?
In most cases, loans are harder to get with bad credit. VA loans may be a bit more difficult to get, but in the case of VA loans, service to country matters more than credit history. All who have completed an active duty tour or have been medically discharged from the service are eligible for VA loans for people with bad credit such as citizens of the US who served in armies allied with the United States, spouses of veterans, and spouses of POW or MIA veterans.
How Does Bankruptcy Or Foreclosure Affect A VA Bad Credit Loan?
Veterans can still qualify for a VA bad credit loan with bankruptcy or foreclosure on their records. The VA specifies that the applicant needs to wait for two years after the discharge of their bankruptcy to secure VA financing. Considering that bankruptcy stays on credit records for up to seven years, two years is not that lengthy. The same rules apply to foreclosures. The only exception is Chapter 13 bankruptcy (where some of the debts are repaid). If the applicant filed Chapter 13 bankruptcy they need to show proof of one year of good, on-time payments. Upon proof of this, they can secure financing.
If you are a disabled veteran there are special “schemes” that the VA provides for this category. Certain veterans even qualify for grants to purchase their homes. Disabled Veterans with bad credit can even purchase homes with bad credit and not have to pay a funding fee.
The most important thing to have to qualify for a VA bad credit loan is being a veteran in good standing. It is important to notify the agency if you are a disabled veteran. Bankruptcy and foreclosure can affect your VA bad credit loan in different ways. The important thing to know is that even if you have bad credit you can usually secure a VA loan.