Minimum Credit Score for VA Loan | VA Loan Requirements

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welcome back to another fabulous red

Friday now I would jump if I could so

you can see my red pants I am wearing

red pants but also the red low on today

red as in our II D remember everyone

deployed here at low B rates we

challenged all of our employees to honor

the fine men and women of the military

by wearing red on Fridays that however

is not why we're here today we are here

today to talk about the minimum credit

score requirements for a VA loan now we

get asked this question almost every

single day

do you guys require a 640 or let me even

rephrase that does the VA have a minimum

score of a 640 and we say no they don't

and also well how is that true I just

called this lender or that lender and

they told me that if I didn't have a 640

I couldn't refinance or I couldn't get a

VA loan well I'm here to tell you

they're wrong all you gotta do is call

low VA rates and we're happy to work

with people regardless of their credit

score now bear with me follow along

because we're going to talk about that

the first thing you need to realize is

that the VA themselves or the VA itself

does not publish or require a minimum

credit score sometimes referred to as

the FICO score there is a V lenders

handbook you can find it online and this

is the handbook that all banks lenders

mortgage companies credit unions who

want to offer VA loans must follow in

order to offer VA loans now you might

say well then why do certain banks have

minimum requirements here's why it is

called I'm going to flip around here

real quick hopefully you can still see

me it's called a lender over lay okay


645 gonna score is a lender overlay what

I mean by that is the lender will go to

the VA lenders handbook and they'll get

all of these written rules that the VA

has and then on top of those rules they

might add some overlays or some

protections some additional rule

and that is absolutely fine VA has no

problem with that at the end of the day

it is not the Department of Veterans

Affairs that is lending you money to buy

a home or to refinance with it's a

lender like lo VA rates and since we are

the ones lending our money of course we

have the ability to set certain minimum

standards or overlays now again lo VA

rates does not have a minimum credit

score requirement in any of our

underwriting handbooks or guidelines we

just don't base our decision solely on

FICO score or current score we look at

it but we're not going to immediately

just tell someone to take a hike because

they have a lower FICO score than a 640

let's talk about FICO scores real quick

gonna jump over here now I'm back gotta

get my trusty eraser I need some room

here okay let's talk about credit scores

here's how the credit score spectrum

works on the low end of the credit score

we have a I think it's 400 okay minimum

FICO score matter of fact I was tricking

you it's 300 you can only see my true

here in the background they just

corrected me and they told me now I've

never seen a 300 FICO score we almost

never see a 400 but you could

essentially if things were really really

bad in your financial life be as low as

a 300 now on the high end is an 850 okay

I'm going to put a frowny face here or

smiley face here you cannot go any lower

than 300 and you cannot go any higher

than 850 now right here in the middle so

to speak I'm going to draw 640 why am I

going to draw 640 generally speaking in

the mortgage industry most lenders put

this overlay of a 640 credit score on

top of the VA guidelines and that is why

many of you watching today may have this

light bulb off your tank

aha that's why and the reason they take

a 640 is because they overtime lenders

we collectively have felt overtime

people with a 645 go score are probably

gonna pay us back once you started

getting below a 640 problems might arise

again I don't want to beat a dead horse

we do not have a minimum FICO score for

our veteran borrowers we do look at it

now let's explain why here at lobia race

we don't look simply at the FICO score

now I remember planning a trip to Cabo

San Lucas Mexico with some friends of

mine about four or five years ago and we

were pumped the weather was going to be

great we were watching the app on our

cell phone you know I added it to my

temperature reader and the weather was

looking great so imagine if I based my

decision to go down to Cabo or anywhere

for that reason solely on temperature I

looked and the weather forecast said it

was going to be 85 degrees and I said

well if it's gonna be 85 degrees I'm

going but the particular weather app

that I was following didn't tell me

about upcoming storms clouds

precipitation all of that stuff because

I didn't care I'm going to base my

decision on one thing alone the next


well we actually ended up having to

cancel that trip to Cabo because a major

hurricane was in or out and it would and

it ended up devastating Cabo the resort

we're going to go to ended up closing

for well over 12 months they closed the

airport luckily that's how we make our

underwriting decisions here at lo VA

rates we don't just disqualify people

because of a FICO score the same way I

would suggest not planning your next

vacation on temperature alone look at

the entire picture that brings me over

here to va loan requirements okay there

is no okay look right here no minimum

credit score we've now established that

that is not a VA loan requirement but

what if your requirement is military

service okay and I'm going to put

honourable here you have to have an

honorable military service right um you

got to have a job

out or income okay I guess you could

have income without a job you could have

a bunch of investments or an annuity or

VA disability a lot of our clients

receive VA disability and that's their

income so you gotta have a job you have

that income you have to have served in

the military

honorably of your home that you're

trying to get money lent on has to

follow certain um standards of living

requirements you know you got to have a

solid roof you can't have lead-based

paint you got to get a pest inspection

I'm not going to bore you today with all

of the VA loan requirements and will

educate you next week and an upcoming

whiteboard seminar here on Google

Hangouts about all of the things we look

at here at lo VA rates to determine your

creditworthiness your creditworthiness

is not simply based on your credit score

it's on a whole list of different things

I hope this has been enlightening I hope

you have learned the next time you talk

to somebody that says oh well you don't

want to use your va loan then it's

because you have to have this 645 go

score send them this link tell them

they're wrong give us a call we would be

happy to help you out right before I

fill a worker looking brighter is some

of our loan applicants and we are

consist approving people at 5:55 8600

again just because you have a 695 go

score doesn't mean you're automatically

they approved either because we don't

base our decision on fight that's enough

on this topic today thank you for tuning

in we will see you next time give us a

call or visit for tuning