VA LENDING GUIDELINES CLARIFIED

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Historically, the VA has provided very little guidance in several areas of lending. That practice is changing with the following clearly defined guidelines becoming effective May 23, 2019.

  • Gift funds are acceptable from a donor who has NO affiliation with the builder, developer, real estate agent, or any other interested party to the transaction.
  • Rental payment history on manually underwritten loans to cover a 24-month time frame directly from the landlord, through information documented on a credit report or by cancelled checks.
  • If the Borrower’s payment history before a Deed in Lieu of or Short Sale was satisfactory, a waiting period from the date of transfer of the property may not be necessary.
  • If a foreclosure, Deed in Lieu of or Short Sale is in conjunction with a bankruptcy, use the latest date of either the discharge of the bankruptcy or the transfer of title on the affected home to establish the beginning date of the re-establishment of credit.
  • Spousal support may once again be treated as a reduction of income.
  • Child support payments will continue to be treated as a monthly liability.
  • Digital signatures are acceptable.
  • Borrowers with multiple properties must have 3-months PITI documented for each property in order to count rental income.

Although this is helpful for lenders, the above clarifications may cause new hurdles for VA borrowers.

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