Tuesday, April 16, 2013

Credit Score Requirements for a Kentucky VA Home Loan


Credit Score Requirements for a Kentucky VA Home Loan




·         If more than one score is supplied by the same repository, the lesser of the scores will be used.
·         Determining Qualifying Credit Score:
o   Middle of 3
o   Lower of 2
o   If only one score is provided, that score is the qualifying credit score for that borrower.
·         640 minimum credit score is required for purchase and full doc refinances.
·         640 minimum credit score is required for any loan with a 15 year term.
·         660 minimum required for IRRRL’s.
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LIABILITIES & CREDIT HISTORY
·         A 24-month history of residence is required on all files.
·         Additionally, a 12-month verification of rent or mortgage with a payment rating is also required on all manually underwritten loans, or if required by DU.  If private party landlord, verification of rental payment requires 12 months cancelled checks.
·         No more than 0x30 in the previous 12 months is allowed on manually underwritten loans.
·         Borrower must provide satisfactory letter of explanation for the disposition of any primary residence converted to a second home or investment property (non-owner occupied).


·         Court-ordered payments should be documented by a copy of the court order.
·         Borrower(s) must have an acceptable existing repayment plan for any arrearages and proof of 12 months on time payments, and/or be required to pay account in full prior to, or at closing.
·         See Collections/Chargeoffs for additional requirements if there are arrearages.







Not permitted.  Settlement offers will not be considered as proof of balance
Are acceptable on accounts that will be paid in full at closing as long as the offer is in writing from the creditor reporting on the credit report.
Consumer Credit Accounts:  Recent derogatory credit within the previous 12 months is generally not permitted on manually underwritten loans.  When the borrower has any currently past due accounts, they must be brought current prior to, or at, closing.  A letter of explanation is required for all derogatory credit.
Any unpaid Collections or Chargeoffs will require a letter of explanation from the borrower.
AUS Approved:
·         Medical Collections/Chargeoffs are not required to be paid.
·         Other Collections/Chargeoffs, if >24 months, not required to be paid, otherwise accounts must be paid in full prior to, or at, closing.
Manual Underwrite:
·         Medical Collections/Chargeoffs are not required to be paid.
·         Other Collections/Chargeoffs must be paid in full prior to, or at closing.
All delinquent Federal debt must be brought current at closing.  All defaulted Federal debt must be paid in full at closing.
Must be paid at, or prior to, closing.
2 years seasoning required from Discharge or Dismissal date.
Borrower must have completed at least 12 months of on-time payments per the plan approved by the Bankruptcy court.  In addition, borrower must receive Bankruptcy court approval to enter into the new mortgage loan transaction.
Manually underwritten loans will treat CCC as a Chapter 13 Bankruptcy.
All bankruptcies must meet seasoning requirements and will be reviewed on a case-by-case basis.  Borrower’s with multiple bankruptcies are generally not acceptable on manually underwritten loans.
·         2 years seasoning is required.
·         Borrower must have a clear CAIVRS.
·         If the foreclosure involved a VA guaranteed loan, the borrower may not have full entitlement available for the new loan.
·         2 years seasoning is required.
·         Borrower must have a clear CAIVRS.
3 years seasoning is required.