How to Get a VA Home Loan After Foreclosure
If you plan to buy a home or refinance your existing home with a VA loan, but had a foreclosure in the past, knowing what actions to take will help you get a VA home loan after foreclosure. Having the right information can help guide you through this not difficult process on your path to obtaining a VA home loan.
VA Loan Foreclosure Requirements
For National Guard members and veterans who have had a foreclosure, the Veterans Administration requires that you wait two years from the date your home was sold at auction. The sale can often be months or even years after you have moved out of the home. Be sure to check with the county in which your home was located to verify the date of sale.
At the time of foreclosure, if your home had a VA home loan, you will need to determine if a loss was incurred by the VA when your home was foreclosed. We can assist you to determine the status of your previous VA loan with the VA. If your foreclosure did result in a claim paid by the VA to the lender who foreclosed on your home, your VA loan entitlement amount may have been affected. In some cases, a National Guard member or veteran may still have enough entitlement to get a new VA loan. For borrowers who don’t have enough remaining entitlement, you may be required to pay a portion or the entire claim amount back to the VA.
If you experienced a deed-in-lieu of foreclosure or believe that your foreclosure was the result of extenuating circumstances, please see our VA Loan FAQ Foreclosure page for more details. It is also good practice to maintain copies of your foreclosure paperwork and have it readily available because you will be required to provide proof of the auction sale date.
Reestablish Your Credit History
To get a VA home loan after foreclosure, you must have a reestablished credit history to qualify for a VA loan. Guidelines set by both the Veterans Administration’s and the lender must be met. The VA’s guidelines require that your credit history show no adverse or derogatory reporting for at least twelve consecutive months. Most VA loan lenders require at least a 620 FICO credit score from two credit bureaus in order to get a VA home loan after foreclosure.
Reestablishing your credit history can be relatively easy, but it is important to set your expectations correctly during this time. If only your home was foreclosed, but you continued to meet your other credit obligations and those accounts are still active, you may already have enough current credit history. However, if your financial hardship extended to all of your finances, you can reestablish your credit history with non-prime offers from credit card issuers and other lenders who specializes in providing credit to borrowers with low credit scores.
Contact a Loan Officer
Once the above steps have been taken and the criteria met, we advise you to contact a loan officer about a VA home loan several months before you begin looking for a new home. This allows your loan officer to verify your VA loan eligibility and entitlement, review your income for loan qualification and make sure that you have met the necessary guidelines to get a VA home loan after foreclosure. Working with an experienced VA loan officer can help answer any questions you might have and confirm that you will meet all of the required criteria.
Apply to Get a VA Home Loan After Foreclosure
Completing these requirements can take time and you can apply to get a VA home loan after foreclosure once you have met the VA’s foreclosure requirements and your credit history has been reestablished. Following these simple steps will help ensure you are on the right path to get a VA home loan.
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