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VA home loans help veterans and active-duty military personnel who qualify to buy or refinance a home. The benefits of VA loans include 0% down payments, competitive interest rates, flexible credit terms, and easier refinancing with the streamline program.

VA streamline refinancing can offer significant savings compared to other loan options. Freedom Mortgage is the #1 VA Lender1 in the US and our Loan Advisors can help you understand if you are eligible for streamline refinancing with less than perfect credit. Talk to us today by visiting our Get Started page or calling 844-267-6544.

Can you get a VA loan with a bad credit score?

Many lenders require a credit score of at least 620 to finance a home with a VA loan. Freedom Mortgage works with veterans and military personnel who have credit scores of less than 620. For streamline refinancing, we work with VA homeowners with credit scores below 580. We understand how your credit can suffer during times of service, and we look at the full picture of your finances.

How to get a VA loan with poor credit

Even if you have poor credit, you may still be able to get a VA loan. We’ll review your credit history and see if you pay your housing costs, credit card bills, and other loans on time each month. Paying your bills regularly for at least the last 12 months helps us determine if you can meet the financial obligations of a new mortgage. 

We look at your income, assets, employment history, and other loan obligations to decide if you qualify. It is possible to get approved for a VA loan after bankruptcy or foreclosure. There are typically more requirements you need to meet, however.

Ways to monitor and improve your credit score

  • Check your credit report. You can get a free report on or contact each of the credit bureaus, Experian, Equifax and TransUnion, to receive your information.
  • Look for mistakes. If you find an error in your credit report, work to have it fixed.  This can improve your credit score and help you qualify for a VA loan.
  • Don’t max out your credit limits. Pay down as much credit card debt as possible and keep a low debt utilization ratio. This ratio compares how much credit you are using to the amount of credit you have available. For example, if you have a credit card with a $10,000 credit limit and a balance of $2,500, your debt utilization ratio is 25%.  
  • Track your bills. Keep a calendar or set up reminders for when bills are due. Paying your bills in full and on time can improve your credit score.

Credit requirements for VA loans versus conventional loans

Veterans can buy or refinance homes with conventional loans. Conventional loans typically have higher credit score and down payment requirements, however. You will also need to pay for private mortgage insurance (PMI) if you make a down payment of less than 20%.

With a VA loan, you can buy a home without a down payment and you won’t have to pay for mortgage insurance, although you will have to pay a funding fee unless an exception applies. Note that you can only buy a primary residence with a VA loan. You can use conventional loans to buy a first home, a vacation home, or an investment property.

Homeowners with VA loans can qualify for streamline refinancing with an Interest Rate Reduction Refinance Loan (IRRRL). These refinances feature less paperwork and more flexible credit terms than refinances with conventional loans.

Veterans, active-duty military personnel, and surviving spouses can be eligible for a VA loan. You will need a Certificate of Eligibility (COE) when you apply, and the house must meet minimum property standards, too.

Talk to Freedom Mortgage about VA streamline refinancing

Freedom Mortgage is happy to work with veterans who have lower credit scores. To speak with one of our loan advisors about refinancing your VA loan, please visit our Get Started page or call 844-267-6544.

1. Inside Mortgage Finance, January to June 2020

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