A VA loan is a home loan program for veterans, active-duty servicemembers, and qualifying surviving spouses, backed by the Department of Veterans Affairs. VA loans require no down payment with full entitlement, no monthly mortgage insurance, and have no VA-mandated minimum credit score. The JD.Mortgage Team is a no-overlay VA lender — we underwrite to actual VA guidelines, not to padded lender minimums, and we run manual underwriting on complex files that automated systems cannot fully evaluate. Files other lenders have already declined for credit score, debt load, or past hardship are exactly the files we’re built to review. 25+ years originating, 3,100+ closed loans, Scotsman Guide Top Originator 2026. Lending in 49 states. Not available in New York.
No minimum credit score. No monthly PMI. $0 down with full entitlement. We specialize in complex VA files — including files other lenders have already declined.
What “No Overlays” Means
An overlay is a credit rule a lender adds on top of VA’s. We don’t add them — we underwrite to VA guidelines. Separate from underwriting, every VA loan must also be eligible for sale or securitization, and Ginnie Mae sets pooling requirements that apply to all lenders and that no lender can waive. Refinances in particular carry seasoning requirements under Ginnie Mae that are broader than VA’s. We’ll tell you upfront if one applies to you.
Last updated: October 6, 2026
Guidance reference: VA Pamphlet 26-7, Ch. 2, 3, 8 and 13 (VA updated July 9, 2026); Ch. 4 (VA updated August 26, 2026); VA Circular 26-25-10 (December 1, 2025); VA Circular 26-23-6, Exhibit B (February 14, 2023)
What Is A VA Loan
The VA does not lend money directly. It provides a loan guarantee to the lender — meaning the VA promises to cover a portion of the loan if the borrower defaults. That guarantee is what allows lenders to offer $0 down, no monthly mortgage insurance, and rates that conventional loans typically cannot match at the same qualification threshold.
As of Q3 2026 (September 2026): VA sets no minimum credit score. Any score floor is an extra rule a lender adds (VA Pamphlet 26-7, Ch. 4; 38 CFR 36.4340). VA uses 41% as a check point, not a limit, for how much of your monthly income goes to debt payments (your debt-to-income ratio). Above 41%, we take a closer look, unless the money left over each month after your bills is at least 20% above VA’s chart. If not, a supervisor can still approve the loan with a signed note listing your strengths (VA Pamphlet 26-7, Ch. 4). With full entitlement (your full VA home loan benefit), there is no VA loan limit. VA asks for no down payment in most cases, but if the price is above VA’s value for the home, you pay the difference in cash. If part of your benefit is still in use (partial entitlement), it is measured against your county’s 2026 loan limit: $832,750 in most counties and higher in some high-cost counties (VA.gov; FHFA, November 25, 2025). The funding fee (a one-time VA fee) is 2.15% on a first-use purchase with less than 5% down and 3.3% on later use with less than 5% down. On an IRRRL (VA’s refinance to lower your rate), it is 0.5% (VA.gov, effective April 7, 2023).
Most loan programs set strict credit score floors. The VA does not. The VA evaluates the full financial picture — income stability, residual income, credit timeline, and service record — and gives lenders the framework to approve files that automated systems cannot fully evaluate. That design is intentional. The VA built this program to make homeownership accessible for the people who served, including those with complicated financial histories.
When one lender says no, that lender said no. The VA did not. Most denials are lender overlays — extra rules the lender added on top of VA guidelines. We do not run overlays.
Core VA Loan Benefits
No Down Payment With Full Entitlement
With full entitlement, you can buy without a down payment regardless of loan amount, subject to lender qualification. That keeps tens of thousands of dollars in your pocket at closing — money that stays available for reserves, moving costs, or whatever else the new home demands.
No Monthly Mortgage Insurance
Conventional loans charge PMI when you put less than 20% down. FHA loans charge MIP for the life of the loan in most cases. VA loans never charge monthly mortgage insurance — saving hundreds per month on larger loans. The VA Funding Fee is a one-time upfront cost, not monthly insurance, and it is fully waived for veterans receiving VA disability compensation.
No Minimum Credit Score
The VA does not publish a credit score floor. Most lenders add their own — 580, 620, 640 are common cutoffs. Those are overlays, not VA rules. We underwrite to actual VA guidelines and run manual underwriting on files that need it. Score still drives the rate offered, but score alone does not decide whether the file gets approved.
Competitive Interest Rates
The rate advantage is most pronounced for borrowers with credit scores in the 620 to 700 range, where conventional pricing penalties are severe and VA pricing is not.
Reusable Benefit For Life
Your VA entitlement does not expire after one use. It can be restored after a prior VA loan is paid off and the property sold. In some scenarios, you can carry two VA loans simultaneously — for example, when buying a new home before selling the existing VA-financed home, or after a PCS move.
Funding Fee Waiver for Veterans With VA Disability Pay
Veterans who get VA disability pay for a condition tied to their service pay no VA funding fee at all. That saves 1.25% to 3.3% of the loan amount. If your husband or wife died in service, or from a condition tied to service, you pay no funding fee either. Not every surviving spouse who can get a VA loan is exempt. Most Veterans never know to ask. We check your Certificate of Eligibility (VA’s record of your home loan benefit) before we quote any price.
Who Qualifies For A VA Loan
VA loan eligibility runs off a Certificate of Eligibility (COE) tied to your service record. We pull the COE directly through VA systems in most cases — you do not need to obtain it separately before starting. Even with a past bankruptcy, foreclosure, or short sale, you may still qualify; entitlement and waiting periods are handled separately from basic service eligibility.
VA Entitlement Explained
Entitlement is the VA’s promise to guarantee a portion of your loan. With full entitlement, you can buy with no down payment regardless of loan amount, subject to lender qualification. With partial or reduced entitlement, your $0-down maximum is tied to the conforming loan limit for your county. Reduced entitlement does not end your VA benefit — it adjusts the no-down-payment ceiling. In most cases the benefit can still be used effectively.
How VA Underwriting Actually Works
Most lenders submit your file to an automated underwriting system. The system returns one of three results: Approve, Refer, or Ineligible. Most lenders act only on Approve. When the system returns Refer — meaning it could not fully evaluate the file — most lenders stop there and call it a denial.
We do not stop there. The VA allows manual underwriting — a real underwriter reviews the entire file in full context. Income pattern, rental history, bank statements, savings behavior, and residual income all become part of the evaluation. That is where complex files get approved that other lenders walk away from.
What VA Evaluates Beyond Your Credit Score
Residual Income
The money left each month after taxes, your house payment and upkeep, and all your debts. VA compares it to a chart based on loan size, family size, and region, and calls the chart a guide. Money left well above the chart is one of the strongest points a file can show when a person reviews it by hand.
Debt-To-Income Ratio
The VA benchmark is 41%, but there is no hard ceiling. Strong residual income routinely offsets DTI above that threshold. We have approved files with DTIs well above 41% when residual income is strong and the rest of the file holds together.
Income Stability
Two years of steady work or documented self-employment history. Short breaks between jobs need no letter: under 30 days if a person reviews your file by hand, or under 60 days if the computer review rates your file as lower risk. Military base pay counts as steady income. If you leave active duty within 12 months of closing, VA wants proof of what comes next, like re-enlisting, a local job offer, or other strong points.
Rental Payment History
Two years of on-time rent is one of the best strengths in your file when a person reviews it by hand. It can help offset a weak spot. VA asks for 24 months of rent history on these files. The proof can come from your landlord, your credit report, or cancelled checks. Any one of these works on its own.
Credit Timeline, Not Just The Score
What happened, when it happened, and whether the trend is clearly improving. A 600 score with a clean 12-month trend after a documented hardship is a different file than a 600 score with active recent lates. Recency and trajectory matter more than the event itself.
VA Loans And Credit Scores — The Reality
The VA does not set a minimum credit score. That is a documented fact, not a sales pitch. What you actually run into is lender overlays — and overlays vary widely from lender to lender. The same borrower can be declined by one lender and approved by another on the same file.
What makes or breaks a low-score VA file is clarity. A file that explains what happened, documents the recovery, and shows why the new payment is affordable gives an underwriter what they need to approve it.
Common VA Loan Scenarios We Approve
Recent Late Payments
One or two late payments in the past 12 months does not automatically disqualify a file. Context matters. A documented explanation with evidence of recovery carries real weight with a manual underwriter.
Collections And Charge-Offs
VA does not require collections to be paid off before closing in most cases. What matters is whether the overall file demonstrates stability and the ability to sustain the new payment going forward.
Bankruptcy
Chapter 7: if it was discharged more than 2 years before your closing date, it can be set aside. Between 1 and 2 years, you need two things: new credit paid on time since, and proof the bankruptcy came from something you could not control, like a job loss. Chapter 13 may be eligible after 12 months of on-time plan payments with the trustee’s approval. How you pay after the filing matters more to us than the filing itself.
Foreclosure Or Short Sale
VA typically requires a 2-year waiting period after a foreclosure. A short sale on a prior VA loan may affect remaining entitlement. Both situations are workable — we review the specifics before drawing conclusions.
High Debt-To-Income Ratio
DTI above 41% is not a hard disqualifier under VA guidelines. Strong residual income is the offset. The VA program is designed to evaluate what is left after the bills — not just the percentage.
VA Seller Concessions — The Negotiating Advantage Most Buyers Miss
Seller concessions are one of the most misunderstood and most underused tools available to a VA buyer. The VA allows sellers to pay up to 4% of the home’s established reasonable value in concessions. On top of that, standard closing costs like title fees, escrow fees, and recording fees can also be seller-paid with no separate VA percentage cap. Most buyers and most agents do not know this distinction. It directly affects how to structure the offer.
Concessions Versus Standard Seller-Paid Costs
How Much Is 4% In Real Numbers
When a file has a high DTI, having the seller pay off a car loan or credit card at closing can move an approval from possible to confirmed. This is a negotiation strategy built into the offer — not a closing-table bonus. We structure it as part of the full approval plan. Read the full Seller Concessions guide.
Documents And The VA Loan Process
Documents To Have Ready
Having these ready before applying significantly shortens the process. The biggest single factor in timeline is how quickly and completely documents are submitted at the start: government-issued photo ID, DD-214 if separated from service (we pull the COE directly in most cases), 30 days of pay stubs, 2 years of W-2s or 1099s (business tax returns if self-employed), 2 months of bank statements with all pages, landlord name and contact for the last 12 to 24 months, and letters of explanation with supporting documents for any major credit events.
Step-By-Step VA Loan Process
Confirm Your COE
We pull your Certificate of Eligibility directly through VA systems in most cases. You typically do not need to obtain it separately before starting.
Pre-Approval
We review income, credit, and entitlement before you make an offer. A legitimate pre-approval gives your offer credibility and prevents surprises mid-transaction.
Find A Home And Structure The Offer
We work with your agent to structure the contract correctly under VA guidelines, including seller concessions and any property condition considerations.
VA Appraisal
A VA-assigned appraiser establishes the reasonable value and confirms the property meets Minimum Property Requirements (safe, sound, and sanitary). MPR conditions are often negotiable in the contract; most required repairs are addressable without derailing the deal.
Underwriting
AUS or manual underwriting depending on the file. All conditions are cleared before we schedule closing.
Closing
Standard VA loans typically close in 30 to 45 days. Manual underwriting files may require a few additional business days.
Refinancing And VA Loan Assumptions
VA IRRRL — Streamline Refinance
The IRRRL is a streamlined VA-to-VA refinance for existing VA loan holders. No new appraisal in most cases, minimal income documentation, and a 0.5% funding fee. Closes in 2 to 4 weeks. Used to lower your rate or convert from an ARM to a fixed rate. See VA IRRRL details.
VA Cash-Out Refinance
The VA cash-out allows you to refinance a conventional, FHA, or existing VA loan into a VA loan and access your home equity, subject to seasoning requirements. Used for debt consolidation, home improvements, or major expenses. Full income and credit documentation required.
VA Loan Assumptions
VA loans are assumable — a qualified buyer can take over your existing loan balance and rate. In a high-rate environment, a low-rate VA loan assumption is a real competitive advantage for sellers. But sellers must proceed carefully: liability release is not the same as entitlement restoration. If the assuming buyer does not substitute their own VA entitlement for yours, your entitlement stays tied to that loan until it is fully paid off. Both parties need to understand this distinction before moving forward.
VA Loan Frequently Asked Questions
Does the VA require a minimum credit score?
No. The VA does not publish a minimum credit score. Lenders add their own minimums — those are called overlays. We work with files other lenders decline by using manual underwriting when the overall file supports approval.
Why did one lender say no but another might approve me?
Lenders add their own requirements on top of VA guidelines — those are called overlays. A denial from one lender is not a denial from VA. We regularly find an approval path on files that other lenders have already declined.
What is residual income and why does it matter?
Residual income is the money left each month after taxes, your house payment and upkeep, and all your debts. VA compares it to a chart based on loan size, family size, and region. VA calls the chart a guide, so it does not say yes or no on its own. VA weighs this leftover money more than the share of your income that goes to debts. Money left well above the chart is a strength that can help when more than 41% of your income goes to debts.
Can I get a VA loan with collections or charge-offs on my credit?
Often yes. VA does not require collections to be paid off before closing in most cases. The strength of your full file — income, residual income, and payment stability — carries more weight than isolated derogatory accounts.
Can I use my VA loan benefit more than once?
Yes. VA entitlement can be restored and reused after a prior VA loan is paid off and the property sold. In some cases you can carry two VA loans simultaneously if your remaining entitlement is sufficient to support it.
Does VA have a loan limit?
With full entitlement, there is no VA loan limit — you can borrow above conforming loan limits with no down payment, subject to lender approval. With partial or reduced entitlement, the $0-down ceiling is tied to the conforming loan limit for your county.
Do VA loans require mortgage insurance?
No. VA loans never require private mortgage insurance regardless of down payment. This is a permanent feature of the program, not a temporary exemption. The funding fee is a one-time upfront charge, not monthly insurance.
What is the VA Funding Fee and who is exempt?
The VA funding fee is a one-time fee paid to VA when your loan closes. It helps pay part of what the VA home loan program costs. It is usually about 1.25% to 3.3% of the loan amount. The amount depends on your down payment and whether this is your first VA loan. Veterans who get VA disability pay for a condition tied to their service pay no fee at all. Surviving spouses of Veterans who died in service, or from a condition tied to service, also pay no fee. Not every surviving spouse who can get a VA loan is exempt.
How soon can I get a VA loan after bankruptcy or foreclosure?
Chapter 7 bankruptcy requires a 2-year waiting period from discharge. Chapter 13 may be eligible after 12 months of on-time plan payments with trustee approval. Foreclosure typically requires a 2-year waiting period. These timelines can vary based on specific circumstances and the underwriter’s review of post-event recovery behavior.
Can I buy a multi-unit property with a VA loan?
Yes. VA loans can be used to purchase properties with up to four units, as long as you occupy one unit as your primary residence. This is one of the strongest VA-specific moves available — letting renters in the other units help cover the mortgage payment.
What is the difference between VA seller concessions and seller-paid closing costs?
Seller concessions are extras the seller pays for you beyond normal closing costs. They include the VA funding fee (a one-time fee paid to VA), debt payoffs, prepaid taxes and insurance, temporary rate buydowns, gifts, and extra points to buy the rate down more. Points are a fee paid up front for a lower rate. Concessions are capped at 4% of the value on VA’s Notice of Value (VA’s written value for the home). Normal seller-paid closing costs like title, closing agent, and recording fees, plus normal points, do not count against that 4% limit. Most buyers, agents, and builders do not know this, and it directly affects how to structure the offer.
VA Loans By State
Every state page is built on the rules that actually change your file in that state: the disabled veteran property tax exemption, the foreclosure process, state income tax and how it hits residual income, insurance realities, and the installations we serve. Not a template with the state name swapped in.
VA loans in Alabama · VA loans in Alaska · VA loans in Arizona · VA loans in Arkansas · VA loans in California · VA loans in Colorado · VA loans in Connecticut · VA loans in Delaware · VA loans in Florida · VA loans in Georgia · VA loans in Hawaii · VA loans in Idaho · VA loans in Illinois · VA loans in Indiana · VA loans in Iowa · VA loans in Kansas · VA loans in Kentucky · VA loans in Louisiana · VA loans in Maine · VA loans in Maryland · VA loans in Massachusetts · VA loans in Michigan · VA loans in Minnesota · VA loans in Mississippi · VA loans in Missouri · VA loans in Montana · VA loans in Nebraska · VA loans in Nevada · VA loans in New Hampshire · VA loans in New Jersey · VA loans in New Mexico · VA loans in North Carolina · VA loans in North Dakota · VA loans in Ohio · VA loans in Oklahoma · VA loans in Oregon · VA loans in Pennsylvania · VA loans in Rhode Island · VA loans in South Carolina · VA loans in South Dakota · VA loans in Tennessee · VA loans in Texas · VA loans in Utah · VA loans in Vermont · VA loans in Virginia · VA loans in Washington · VA loans in West Virginia · VA loans in Wisconsin · VA loans in Wyoming
Related Resources
VA IRRRL Streamline Refinance
Lower your existing VA rate fast. No appraisal in most cases, minimal docs, $0 out-of-pocket, close in 2 to 4 weeks.
VA Cash-Out Refinance
Refinance a conventional, FHA, or existing VA loan into a VA loan and access your home equity for debt consolidation, improvements, or major expenses, subject to seasoning requirements.
VA Seller Concessions Guide
The full breakdown of the 4% concession cap, what counts and what does not, and how to structure offers that maximize VA-specific advantages.
About J.D. Peck
25+ years originating, 3,100+ closed loans, Scotsman Guide Top Originator 2026. NMLS 314883.
Written by J.D. Peck — Area Manager / Mortgage Loan Originator at Paramount Residential Mortgage Group, Inc. NMLS 314883. 25+ years originating, 3,100+ closed loans, Scotsman Guide Top Originator 2026. Last updated September 1, 2026.
Buying near Fort Carson, Peterson, or the Academy? Work with a Colorado Springs VA loan lender that lends to VA guidelines with no overlays.
Ready To Review Your VA Loan Options
We review the full picture — income, credit, service history, entitlement, and goals — and give you a straight answer about what is possible and what the cleanest path looks like. No guesswork. No pressure.
Source: JD.Mortgage Team at PRMG, VA Loans | No Minimum Credit Score | Manual Underwriting, updated September 2026, https://jd.mortgage/va-loans/