Is It Easy or Hard to Qualify for a VA Loan in California?

California military members and veterans tend to have a lot of questions about the VA home loan program. One of the most common questions has to do with the program requirements and the overall qualification process.

A lot of people want to know: Is it easy or hard to qualify for a VA loan in California?

These loans are partially guaranteed by the federal government, via the U.S. Department of Veterans Affairs. Because of this, mortgage lenders can be more lenient with regard to qualification criteria.

Through the rest of this article, we’ll take a closer look at this common question and explore the minimum program requirements.

Is It Easy or Hard to Get a VA Home Loan?

In order to understand the mortgage loan qualification process, you first have to understand how the program works.

VA loans are one example of a government-backed mortgage. Federal Housing Administration (FHA) loans are another example. With both of these programs, the federal government insures or guarantees the loan to protect the lender from potential financial losses related to borrower default.

This added “layer” of protection enables lenders to be a bit more flexible, when it comes to credit scores, debt ratios, and other mortgage qualification checkpoints.

This government backing also makes it fairly easy to qualify for a VA loan in California, as long as you meet the military service standards. This program is available to most active-duty military members, reservists, National Guard members, and in some cases surviving spouses.

Active-duty members are generally eligible after 90 days of service. National Guard and reservists may have to wait for up to six years, unless they get activated for active duty.

As it states on the Department of Veterans Affairs website:

National Guard members and reservists are eligible for a VA home loan if they have completed at least six years of honorable service, are mobilized for active-duty service for a period of at least 90 days, or are discharged because of a service-connected disability.

Minimum Qualification Requirements

As mentioned above, it’s fairly easy to qualify for a VA-guaranteed mortgage loan in California, as long as you meet a few basic requirements.

The most important thing is that you have sufficient income to manage your monthly payments and repay your loan over time. To verify this, banks and mortgage lenders typically look at pay stubs, bank statements, tax records, etc.

This is true for both VA and conventional loans, by the way. (The term “conventional” refers to a mortgage loan that is not insured or guaranteed by the government. This label distinguishes them from the FHA and VA loan programs, which do receive government backing.)

Sufficient military service is the main requirement for this program. We touched on that above. Active-duty military members in California are typically eligible for VA loans after just a few months of continuous service. National Guard members and reservists typically have to wait several years, unless they get called up for active duty lasting 90 days or more.

As for credit scores, the VA does not impose any minimum score requirement. They leave that up to the lender to decide. In certain cases, it’s possible to qualify for a VA loan in California with a credit score down into the 500 range. Conventional mortgage programs, on the other hand, typically require a score of 600 or higher and can be stricter in other areas as well.

How This Program Benefits Home Buyers

We’ve covered one important benefit of using a VA loan to buy a house in California. Generally speaking, it’s the easiest type of mortgage loan to qualify for, due to the government backing described above.

But the benefits don’t end there.

Eligible borrowers can also use this program to finance 100% of their home purchase. This means you don’t have to put any money down at all – a major benefit that reduces one of the biggest hurdles to homeownership.

This program also allows borrowers to avoid paying mortgage insurance, which is typically required for home loans with a small down payment. This could potentially save you hundreds of dollars per month, compared to conventional financing with private mortgage insurance attached.

Overview of the Application and Approval Process

The VA loan application process is fairly easy to navigate as well, once you have a few documents. The first step is to obtain your Certificate of Eligibility (COE).

The COE is a document issued by the U.S. Department of Veterans Affairs (VA) that verifies your eligibility for this program. You can request this document through the VA.gov website, or have the mortgage lender do it for you.

You will need to provide some other standard documentation as well, as with any other type of mortgage loan. This includes some of the items mentioned earlier – pay stubs, bank statements, tax records, and a “gift letter” if someone else is contributing money to your down payment.

Once all of the documentation has been submitted, the process moves forward as it would with a regular mortgage loan. You can get pre-approved for a specific amount. You’ll shop for a home and submit an offer when the right property comes along.

The property will need to be appraised, to make sure it meets the VA’s minimum guidelines. And then it’s on to the closing process, after which you will be a new homeowner!