What Credit Score Is Needed for a VA Home Loan in California?

At a glance: This article explains what credit score is needed to qualify for a VA loan in California. Generally speaking, a score in the low 600 range or higher will put you in a good position to qualify for a VA-guaranteed home loan in California. But that number is not set in stone. Exceptions can be made for well-qualified borrowers.

The VA home loan program is arguably the best mortgage financing option for military members and veterans. It offers significant advantages compared to other programs, including 100% financing for most borrowers.

Another one of the benefits is that you don’t necessarily need an excellent credit score to qualify for a VA loan in California. This program is fairly flexible, in terms of borrower qualification requirements. And that’s the subject of today’s tutorial.

Related article: Understanding the VA loan process

Minimum Credit Score Needed for a VA Home Loan

The first thing you should know, as a home buyer, is that the Department of Veterans Affairs does not require a minimum credit score for VA loans in California. They generally leave that up to the mortgage lenders who approve borrowers.

The Department of Veterans Affairs does not lend money directly to borrowers. Instead, they partially guarantee mortgage loans originated by VA-approved lenders. In other words, it’s the lender’s call as to what credit score you need to qualify for a loan.

As it states on the Department of Veterans Affairs website: “However, VA guidelines do not state a minimum credit score to qualify. This gives lenders leniency to approve loans with lower scores.”

So, What’s the Ideal Range for Borrowers?

Getting back to the question at hand. What do you need to get a VA-backed home loan in California?

As mentioned earlier, a score of 600 or higher is usually sufficient for this program. But again, different lenders have different standards. Some mortgage lenders in California might set the credit score “bar” higher, perhaps at 640 and above. Other lenders might be willing to go lower, as long as the borrower is well-qualified in other areas.

It’s also worth mentioning that the VA home loan program is one of the most flexible mortgage programs out there. This is partly due to the government guarantee mentioned earlier. When participating in this program, mortgage lenders have an added layer of protection against monetary losses associated with borrower default.

As a result, the credit score requirements for a VA loan in California are often lower than those associated with a conventional or “regular” mortgage product.

At Bridgepoint Funding, we work with a variety of lenders and investors. This allows us to give our clients access to a broader range of mortgage loan options. So don’t be discouraged if your credit score is slightly lower than what is typically required for a VA loan. Ultimately, the only way to find out if you qualify for the program is to speak to a VA approved mortgage lender — like us!

Other Important Requirements For a VA Loan

Home buyers who are considering this program should also realize that the credit score is just one of several requirements for a VA loan in California. While the program allows home buyers to purchase a house with no money down, there are some other eligibility criteria you need to know about.

1. The ability to repay the loan

For obvious reasons, mortgage lenders will review your financial situation to make sure you have the income necessary to keep up with your monthly house payments. This is true for California VA loans, as well as other financing programs.

To determine your income, the lender will review your bank statements, pay stubs (or digital equivalent), W-2 forms, and other financial documents.

2. A reasonable level of debt

In addition to having a decent credit score, VA loan borrowers in California need to have a manageable level of debt.

Mortgage lenders will evaluate your “debt-to-income” ratio to make sure you can handle the added debt associated with a home loan. Your other monthly expenses, such as credit scores and auto loans, will also be considered.

The bottom line is that you need to have sufficient income to cover your monthly mortgage payments, on top of your other debt obligations. This is in everyone’s best interest, including yours.

3. Certificate of Eligibility

Borrowers who wants to apply for a VA loan in California must also obtain a Certificate of Eligibility, or COE. As its name suggests, this document tells the mortgage lender that you are in fact eligible to participate in the VA loan program. You can request this document directly from the Department of Veterans Affairs, or we can request it on your behalf.

Get Straight Answers to Your Mortgage Questions

Bridgepoint Funding has one of the most knowledgeable teams in California, when it comes to VA home loans. We specialize in this program and have helped many borrowers all across the Golden State.

Want to know if your credit score is good enough for a VA loan? Do you have questions about the application process or other aspects of the program? Please contact our staff with any mortgage-related questions you have. We look forward to helping you!