VA Loans After Foreclosure
2 years after a foreclosure has happened, a Veteran with Basic Entitlement in place (or restored) can possibly qualify for a new VA loan. No, the VA or the lender will not just automatically allow you to qualify for a new VA loan, but it is possible. Some of the things that will be required include:
- The Veteran must have re-established that they are credit worthy
- Must have a credit score over 620
- No late payments in the last 12 months
- Consistent income source
For Veterans who have had a foreclosure in the past, it is common for them to borrow less money when getting a VA loan after foreclosure – because no one wants to make the same mistake twice! Lower loan amounts means that payments are much more affordable.
Short Sale and Foreclosure: Is There a Difference?
What is the difference between a short sale and a foreclosure? A short sale means that you have sold your home for less than was owed to the bankfor your mortgage. While it is true that a short sale help lessen the impact on your credit as compared to a foreclosure, there are also different requirements when getting a new VA loan after a short sale vs a foreclosure.
Learn more about getting a VA loan after a short sale here.
Generally speaking, foreclosures that happened more than 2 years ago are not weighed as heavily as less than 2 years ago (and some lenders will disregard them if they happened more than 2 years ago) and it is possible to get a new VA loan if you have had a foreclosure if these requirements are met:
1. Have reestablished credit and good payment history over a continued period (at least one year)
2. Foreclosure was due to documented extreme extenuating circumstance such as unemployment, medical bills not covered by insurance, etc.
VA loans after foreclosure have a much more lenient waiting period than FHA loans — FHA loans typically require 3 years after a foreclosure or short sale.
Get a VA Loan After Foreclosure: Qualify Now
Having a foreclosure or short sale is not the end of the world. Contact one of our VA loan experts today and get an individual scenario and quote for your situation that includes a breakdown of your interest rate, fees and what else you can expect when you close. Contact us today!