Although a lender could approve a borrower with a score of, say, 500 by manually underwriting it, I think the odds of that happening are quite remote. Someone with a 500 score would have some combination of currently delinquent obligations, collection accounts and possibly liens and judgments. This would indicate to a lender that the borrower doesn't have adequate control of their finances.
Practically speaking, getting an approval with a 580 score is realistic, although the rate will be higher than for someone with a higher score, and the borrower may have to clear up any currently delinquent obligations before the lender will fund the loan.
The good news is that low credit scores are fixable, although it may take some time and effort. If there are credit cards that are close to the credit limit or over the limit, reducing the balances will improve the scores significantly. If there are collection accounts and judgments, it is worth contacting the creditors to negotiate lower settlement amounts.
Finding a loan officer who's willing to help you through the process of getting qualified—even if you have major craters on your credit report—is worth doing early in the game. It is ALWAYS possible to improve a credit score, but it takes a plan and the determination to follow through and execute it.
VA Home Loan is 100% Zero down payment required, making this the most idea home loan for veteran and their families. Many unfortunately are not aware of the program or don't think they will qualify. I encourage you to look into your eligible if you have ever been in the military.
You will also need to get your Certificate of Eligibility (COE) you can do this very easy by going through the Web LGY System . You can also obtain your COE by completing VA Form 26-1880 PDF and mailing it in. Click here for the fill in form ... You will need your discharge or separation papers DD214 to complete this form.
How to Apply for a VA Home Loan Certificate Of Eligility (COE)
Roxy Redenbaugh, Broker
Sr Mortgage Consultant
Residential and Commercial
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