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guidance when underwriting VA-guaranteed loans: Lenders are encouraged to make VA loans to all qualified Veterans who apply. VA’s underwriting standards are intended to provide guidelines for underwriters. Decisions must be based on sound application of the standards, and underwriters are expected to use good judgment and flexibility in applying
This chapter addresses the verifications, procedures, and analysis involved in underwriting a VA-guaranteed loan. It provides guidance on how to treat income, debts and obligations, credit history, and so on, and how to present and analyze these items on VA’s loan analysis form.
Lenders are encouraged to apply flexibility and reasonable judgement when reviewing loan applications from Veterans who are seeking to use their VA home loan benefits. Key changes include: Chapter 4, Topic 2 includes additional details for analyzing income derived from commissions and rental income.
Specifics concerning income stability can be found in Chapter 4 of the VA Lender's Handbook. In all cases employment must be verified for a two-year period and any gaps of employment addressed by the applicant in a written format.
If a debt is not considered and the logic is not highly visible, a notation should be made in the remarks section of the Loan Analysis Form. Specifics may be found in Chapter 4 of the VA Lender's Handbook.
A listing of agencies and contact phone numbers are contained in Chapter 4 of the VA Lender's Handbook. If it is determined that there is no claim against the Veteran, the lender should document this by written confirmation from the agency or the lender telephone certification.
Loan and Guaranty, Chapter 4 - Credit Underwriting, Chapter 5 - How to Process VA Loans. A reader asks, “Can you get a VA loan if there is judgment against you or pending?”
