VA Loans for 500 Credit Scores: What You Need to Know

VA loans with 500 credit scores means you may have to meet the VA Manual Underwriting guidelines

VA manual underwriting basics with a 500 credit score;

24 months’ rent history is a must

• Cancelled checks
• Third-Party Management Company
• Private Party Verification
• Rent-free living with family

Credit Report History

• No late payments in the past 12 months, if so, isolated is ok
• Any Charged off or Collections accounts in the past 24 months will require a Letter of Explanation (LOE)
• LOE detailing the reason for the delinquent credit and how to prevent in the future

Importantly, ensure you work with a Loan Officer and Lender experienced in manually underwritten VA loans who will review all your options. Even if you meet the manual underwriting criteria, a VA Underwriter will still assess all risks and compensating factors before making a final decision.

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