VA Loan – Manual Underwrite – 500 Minimum Score

Army Family Series: Real American Soldier With Wife & Son

Low Credit Score
500 Minimum Score
Manual Underwrite

VA Key Underwriting Criteria

  • There is no maximum debt ratio. However, the lender must provide compensating factors if the total debt ratio is more than 41 percent.
  • Jan 1st 2023 conforming loan limit is $726,200. You buy a house for $1,200,000+ with your VA eligibility and it is ZERO down.
  • VA’s residual income guidelines ensure Veteran borrowers can afford the loan. These guidelines establish how much money a Veteran must have left over after all debts and living expenses are considered.
  • There is no minimum credit score requirement. Instead, VA requires a lender to review the entire loan profile.

When applying for a VA loan if you are told a required minimum credit score of 620, 600 or 580 is needed or you must have a debt to income ratio of no more than 41 percent.  These are called Lender Overlays to the VA underwriting guidelines.

Access Capital Group, Inc. is a NO Overlay Lender.

A lot of times when a Veteran has higher Debt to Income ratios, lower credit scores and or past credit charge off or collection accounts a Manual Underwrite is necessary.   A manual underwrite is when you do not receive an automated approval from Fannie Mae and Freddie Mac underwriting systems.

Keys to a manual underwritten VA Loan

24 months rent history is a must

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

 Credit 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
  • Rent free living with family

Compensating factors

  • Compensating factors may affect the loan decision. These factors are especially important when reviewing loans which are marginal with respect to residual income or debt-to-income ratio
  • Conservative use of consumer credit
  • LOE detailing the reason for the delinquent credit and how to prevent in the future
  • Minimal consumer debt
  • Long-term employment
  • Significant liquid assets
  • Sizable down-payment
  • The existence of equity in refinancing loans
  • Little or no increase in shelter expense
  • Military benefits
  • High residual income
  • Low debt-to-income ratio


Most importantly make sure you are working with a Loan Officer and Lender who will take the time to review all your VA loan options and has experience working with manually underwritten VA Loans. Because even if you meet all the VA manual underwriting criteria the loan must still be underwritten by a VA Underwriter who must weigh all the risks and compensating factors to make their final loan decision.

VA Loan Low Credit Score  ZERO DOWN LOAN 500 Minimum Credit
VA IRRRL No Credit Score Required


Contact Us

Access Capital Group Inc.
202 E. Earll Drive
Suite 460
Phoenix, AZ 85012

Phone: 6026485860


NMLS Consumer Access
NMLS # 33043

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