2025 VA Loan Guidelines 

Whether buying a home or refinancing an existing home, you must know the 2025 VA Loan Guidelines that will allow you to make better long-term financial decisions. If you are an applicant that has questions, please call us at Ph: 800-743-7556 or just submit the Info Request form found on this page.

Important Key Elements For VA Loan Approval:

There are 3 key elements today to any mortgage approval.

• Credit – Your credit score & history are the most important factor. Most lenders and banks will want to see the applicants credit score above 600
• Debt to Income (DTI) – This ratio determines how much of a payment you can afford under the lending guidelines.
• Loan to Value (LTV) – This ratio determines how much you borrow against the value of the property. VA does permit 100 loan-to-value.

The most common of VA loans is the VA 30-year fixed program, however, home buyers can also select a 15-year fix term as well as an assortment of adjustable rate (ARM) options.

Credit Score and Credit Depth:
Credit Score – Veterans Affairs (VA) insures VA loans and does not require a minimum FICO score. However, lenders and banks generally have their own in-house requirements that overrule this. Most lenders today require the minimum mid-score to be at 580-620 for 100% financing.  The credit report must clearly support an applicant’s ability to meet all financial obligations responsibly.

Some lenders will accept mid-scores a little lower, but you will need to have other strong factors such as a larger down payment (5% -10% down) a good amount of saving reserves in the bank and low debt. All of these are considered strong “compensating factors” and increase the borrower’s chances of being approved with a lower credit score.
VA loan requirements do not consider the absence of a credit history as a negative. However, a minimum two-year history of the applicant, including residence, income, assets, and credit must be demonstrated.

• Less than or = $806,500: None Required
• $806,500 to $1,209,750: None Required
• $1,209,750 – $4,000,000:   3-12 Months PITI depending on the credit, final loan amount

• Seller paying for buyer’s VA funding fee
• Concessions for the buyer’s property taxes and insurance
• Concessions for extra points to provide permanent interest rate buy-downs/reduction
• Seller concessions do not include:
• payment of the buyer’s closing costs, or payment of points as appropriate to the market

Income Documentation Requirements: 
VA loan requirements state that it is not necessary for the applicant on the mortgage to have income when the co-applicant/spouse has sufficient income to support all debt obligations.

W2 Applicants – VA requires two years of employment with stable income, with supporting W2 forms as proof of income. Borrowers are not required to be with the same employer for two years. However, the same line of work is often preferred.

1099 Self-Employed Applicants – VA requires last two years of complete tax returns as proof of stable income. Any borrower that transitioned from a W2 employee to self-employed in the last two years is not eligible.

Part-Time – VA loan requirements allow for part-time job income as long as it has been for no less than two years.

Active Duty Military – You will need a Leave and Earnings Statement (LES) and a Statement of Service. If the applicant’s separation date is 12 months or less from closing, the continuance of income must be documented by one of the following methods:

• The applicant must have re-enlisted (provide documentation); or
• The applicant must state he or she intends to re-enlist and provide a statement from the Commanding Officer confirming there is no reason the applicant would not be permitted to re-enlist.

VA only will accept a valid offer of civilian employment for qualification in situations where the applicant will be discharged within 12 months of closing. Salary plus BHA, clothing allowance and rations may be used to qualify.

Other Income – VA allows for other types of income types as long as they are property documents and show continuance.