What Are VA Home Loan Requirements?

Quick Answer: VA home loan requirements include minimum service requirements (90 consecutive days during wartime or 181 days during peacetime for active duty; 6+ years for National Guard/Reserves), a Certificate of Eligibility (COE), sufficient income to cover mortgage payments, and acceptable credit (typically 620+ FICO). Unlike conventional loans, VA loans require no down payment and no PMI, but you must meet VA-specific occupancy and property standards.

Discuss your VA loan strategy: Book a free call at https://askweldonhobbs.com (20+ years helping veterans maximize VA loan benefits nationwide)

In my 20+ years helping hundreds of families navigate VA loans nationwide, I've worked as a Certified Financial Coach coordinating mortgage qualification with lenders, CPAs, and financial advisors. I'm Weldon Hobbs, and I've learned that veterans who understand the complete requirements before starting their home search close 40% faster than those who discover gaps mid-process.

The VA home loan benefit represents one of the most powerful wealth-building tools available to service members—but only if you understand how to qualify properly.

The 5-Part VA Loan Eligibility Framework

VA loan requirements fall into five distinct categories, each with specific thresholds and documentation needs. Understanding all five upfront prevents the frustrating delays I see families experience when they discover gaps mid-transaction.

Part 1: Service Requirements (Who Qualifies)

The VA establishes minimum service requirements based on when and how you served:

Active Duty Service Members:

• Wartime service: 90 consecutive days
• Peacetime service: 181 consecutive days
• Current active duty: 90+ days of continuous service

Veterans:

• Discharged for service-connected disability: May qualify regardless of length
• Otherwise: Must meet active duty minimums listed above
• Discharge status: Must be other than dishonorable

National Guard and Reserve Members:

• 6+ years of service
• Must have received honorable discharge
• May qualify earlier if mobilized for active duty

Surviving Spouses:

• Spouse died in service or from service-connected disability
• Spouse was totally disabled and entitled to compensation
• Must not have remarried (some exceptions apply)

I've seen veterans assume they qualify based solely on their DD-214, only to discover their discharge characterization creates issues. The "other than dishonorable" requirement means even a general discharge can sometimes pose challenges depending on circumstances.

Part 2: Certificate of Eligibility (Proving Your Benefit)

The COE serves as official documentation that you're entitled to VA loan benefits:

How to Obtain:

• Online through eBenefits portal (fastest—usually 24-48 hours)
• Through your lender using WebLGY system
• Mail VA Form 26-1880 with supporting documents (slowest—4-6 weeks)

Required Documentation:

• DD-214 (active duty veterans)
• Current statement of service (active duty)
• NGB-22 (National Guard)
• Reserve retirement points statement (Reserves)
• Marriage certificate and death certificate (surviving spouses)

Entitlement Amounts:

The COE shows your available entitlement:

• Basic entitlement: $36,000
• Bonus entitlement: Up to $113,275 (varies by county)
• Total potential: Up to $149,275 in most counties

First-time users get full entitlement. If you've used your benefit before, the COE shows your remaining entitlement—critical for determining if you can buy without a down payment.

Navigating VA loan qualification requires both strategic clarity and understanding YOUR timeline. I've helped hundreds of families through this transition nationwide. Book a free 30-minute Transition Strategy Call to discuss your specific situation—I'll help you apply this framework and connect you with an expert in your market.

Part 3: Credit Requirements (Financial Qualification)

While the VA itself doesn't set minimum credit scores, lenders typically require:

Typical Lender Minimums:

• Credit score: 620+ FICO for most lenders
• Some lenders accept 580+ with compensating factors
• VA streamline refinance: May accept lower scores

Credit History Evaluation:

• No bankruptcies in past 2 years (Chapter 7)
• No bankruptcies in past 1 year (Chapter 13, with payments)
• No foreclosures in past 2 years
• Derogatory credit must be explained

Compensating Factors:

If your credit score is borderline (580-640), lenders look for:

• Substantial cash reserves (6+ months payments)
• Low debt-to-income ratio (under 35%)
• History of paying rent/mortgage on time
• Significant down payment (even though not required)
• Strong stable employment (2+ years same field)

I've worked with veterans who had 590 credit scores get approved by demonstrating 12 months of perfect rent payments plus 8 months reserves. The VA's flexibility allows manual underwriting that considers the whole picture, not just the credit score.

Part 4: Income and Debt Requirements (Affordability)

The VA requires proof you can afford the mortgage through residual income calculations:

Residual Income Standard:

Unlike conventional loans that use only debt-to-income ratios, the VA requires minimum residual income—money left over after all debts, taxes, and housing costs.

Minimum Residual Income (Family of 4, Midwest):

• Loan of $79,999 or less: $1,003/month
• Loan of $80,000+: $1,062/month
• Higher requirements in West/Northeast
• Lower requirements in South

Income Documentation:

• 2 years W-2s and tax returns
• Recent pay stubs (30 days)
• Verification of employment
• Other income sources (disability, pension, alimony, etc.)

Debt-to-Income Ratio:

• Preferred maximum: 41%
• Can exceed with strong compensating factors
• Calculated using gross monthly income

What Counts as Income:

• Base military pay
• VA disability compensation (if continuing 3+ years)
• BAH (Basic Allowance for Housing)
• BAS (Basic Allowance for Subsistence)
• Bonus/incentive pay (if continuing)
• Spouse's income
• Part-time income (if 2+ year history)
• Rental income (75% of gross rent)

The residual income requirement is where I see the most surprises. You might qualify for a $350,000 loan based on DTI but fail residual income—or vice versa. Both must clear.

Part 5: Property Requirements (What You Can Buy)

The VA requires the property meet minimum property requirements (MPRs):

Property Must Be:

• Your primary residence (occupancy within 60 days)
• Safe, structurally sound, and sanitary
• Free of hazards (lead paint, asbestos in living areas)
• Have adequate heating, clean water, and safe electrical
• Meet local building codes

Property Types Allowed:

• Single-family homes
• Condos (must be VA-approved)
• Townhomes
• Manufactured homes (if permanently affixed)
• Multi-unit properties (up to 4 units, must occupy one)

Common MPR Issues:

• Peeling exterior paint (possible lead hazard)
• Missing GFCI outlets in kitchen/bathrooms
• Defective roof or gutters
• Non-functioning major appliances
• Septic systems not inspected/certified

Required Inspections:

• VA appraisal (includes MPR inspection)
• Well water testing (if applicable)
• Septic inspection (if applicable)
• Wood-destroying insect inspection (some regions)

Properties that fail MPRs must be repaired before closing. Unlike FHA, sellers have no obligation to make repairs—you'll need to negotiate who pays.

Common Qualification Mistakes to Avoid

Mistake 1: Assuming Full Entitlement Without Checking

If you've used your VA benefit before and haven't sold that property, your remaining entitlement might not cover your new purchase without a down payment.

Mistake 2: Not Getting COE Early

Waiting until you're under contract causes delays. Get your COE before house hunting starts.

Mistake 3: Ignoring Residual Income

You might qualify by DTI standards but fail residual income. Know both numbers.

Mistake 4: Mixing Up Discharge Types

"General Under Honorable Conditions" isn't the same as "Honorable"—it may require additional review.

Mistake 5: Assuming All Lenders Are Equal

VA loan expertise varies dramatically. Some lenders close in 21 days; others take 60+.

Strategic Qualification Timing

6 Months Before House Hunting:

• Pull credit reports from all three bureaus
• Identify any errors and dispute them
• Address any collections or derogatory items
• Build reserves if credit score is borderline

3 Months Before:

• Gather service documentation
• Obtain Certificate of Eligibility
• Get pre-qualified with 2-3 VA-experienced lenders
• Understand your full entitlement status

1 Month Before:

• Update employment verification
• Gather recent pay stubs
• Get final pre-approval with chosen lender
• Avoid any major credit changes

During Home Search:

• Stay employed with same employer
• Don't make major purchases
• Don't open new credit accounts
• Keep bank statements organized

Key Takeaways

1. Service requirements vary by era: 90 days wartime vs. 181 days peacetime for active duty; 6 years for Guard/Reserve
2. COE is mandatory: Get it early through eBenefits—takes 24-48 hours online vs. 4-6 weeks by mail
3. Credit flexibility exists: 620+ is typical, but manual underwriting can work with compensating factors down to 580
4. Residual income matters: You must clear BOTH DTI and residual income requirements—not just one
5. Property must be your primary residence: VA loans are for owner-occupied homes only
6. Full entitlement eliminates down payment: But only if you have full unused entitlement for the loan amount
7. Lender expertise varies: Choose lenders who close 200+ VA loans annually—processing time differs drastically

Ready to Apply This to Your Situation?

While this framework gives you the strategic foundation, your specific circumstances deserve personalized guidance. Whether you're facing VA loan qualification anywhere across the nation, I'm here to help you think through the complete strategy.

Here's how the free 30-minute Transition Strategy Call works: We'll identify which of the 12 major life transitions you're navigating, map out how to optimize for wealth outcomes by coordinating with your CPA/attorney/financial advisor, then figure out if real estate makes sense right now—and if so, exactly how to execute.

If you're not in Colorado Springs, I'll connect you with a transition-focused real estate professional in your market through my curated nationwide network.

[Book Your Free Transition Strategy Call] → https://askweldonhobbs.com

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