VA loan restrictions, often called “overlays,” mean lenders add their own criteria beyond the VA’s minimums. Lenders set specific credit score minimums and debt-to-income ratio limits. These overlays heavily influence which VA home loan company might be less restrictive. The VA itself doesn’t set a minimum credit score. However, most lenders require a minimum score, often around 620, though some accept scores in the high 500s. This score isn’t a VA rule; it’s a lender overlay. When searching for the right credit fit, shopping around is the way to go – it can mean all the difference in finding an option that truly fits your financial profile.
DTI compares monthly debt payments to gross monthly income. The VA suggests a 41% DTI. This is a suggestion, not a rule, so some lenders may be more lenient, especially if you have other financial strengths. If your DTI is high, consider speaking to multiple lenders. You can learn how they handle higher DTIs and if there are still routes you can take. Lenders add overlays to property requirements, too. The sticklers they are, their selection process involves inspecting every nook and cranny, from the home’s history to its surroundings. The company with the best credit requirements may have more stringent rules for property types. Finding the right VA lender involves balancing various factors based on your needs and the loan type you seek.
