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VA Loans and Minimum Employment Requirements

First time home buyers looking for a house to purchase using a VA guaranteed mortgage have lots of questions. Some of the most common topics include employment standards and income requirements–how long does a buyer have to hold a job to qualify for a VA mortgage? Is there a minimum income level required for a successful VA loan application?

Eligible vets who are still serving on active duty generally don’t have to worry much about the employment requirements–it’s a simple matter to verify that the applicant is still on active duty. Those who are in the Guard, Reserves, or who have retired/separated from the military have different issues. How long does the VA require you to work that civilian job before it will accept your application?

The short answer is that the VA has flexible standards based on your situation. Lenders are required to verify a minimum of two years’ employment, but VA loan rules state, “If the applicant has been employed by the present employer less than 2 years…verify prior employment plus present employment covering a total of 2 years.”

It’s easy to see from that statement that the VA doesn’t have a set of restrictive standards when it comes to employment–but it does require some evidence in writing to bolster an application when the two-year minimum isn’t met.

The VA official site reminds loan officers they need to provide a written explanation why two years of employment cannot be verified and “compare any different types of employment verifications obtained (such as, Verification of Employment (VOE), pay stubs, and tax returns for consistency), and clarify any substantial differences in the data that would have a bearing on the qualification of the applicant.”

As for income minimums, there are none. Instead, the VA loan process uses a debt-to-income ratio standard instead. How much a borrower makes, how much he or she pays out in monthly obligations, plus the theoretical amount of a VA loan are reviewed to see if the borrower can afford the loan.

This is the standard used to approve the VA loan application (along with the usual credit check and other required considerations) rather than examining the specific amount a loan applicant makes per year and deciding on that basis.

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About Joe Wallace

Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association.

8 Responses to VA Loans and Minimum Employment Requirements

  1. marie says:

    this website has a lot of great information, but it doesn’t answer my question regarding whether non sufficient funds fees on bank statements will ruin our chances of va loan approval.

    my husband and i have been with our bank for 5 years, and have never had an issue with nsf. our debt to income ratio is low, our credit is good and our payment history is stellar. we have, however, accumulated 1 nsf charge a month since may – all well under $100. we have been caring for my sick grandmother, and many things have been neglected — along with checking our account balance daily. the charges overdrafted into our savings. we make more than enough to cover our bills, and the mortgage we’re applying for will be almost $100 less than our current lease. it’s just a matter of monitering our account so we know not making certain purchases if our balance is getting low, which we have started doing again on a regular basis. while we have a lot going on, it is no excuse for financial issues.

    my question is, how do va underwriters view nsf charges? will a good loe explain them away, and allow all of the positives on our loan application to overshadow this, or should we plan to renew our lease?

    • Joe Wallace says:

      Since the lender is responsible for underwriting the loan, this is an issue you’d need to take up directly with him or her. The VA doesn’t specifically address the issue you mention but the lender does have discretion in such cases–it’s especially helpful to provide information in writing with regards to unique circumstances like these. Work with your lender and be sure to provide any supporting documentation you can provide to back up your specific unique circumstances.

  2. Jarvis says:

    Hi, I am having a loan reviewed now. I have been at my current job for 1 year and 5 months and before that I was woking a part-time job and a VA work study.Will this hurt my chances of obtaining a loan?Thanks

    • Joe Wallace says:

      VA loans require the lender to “verify a minimum of two years” worth of employment, but does not necessarily need those two years to be with the same company. According to the VA official site, “If the applicant has been employed by the present employer less than 2 years…verify prior employment plus present employment covering a total of 2 years.”

  3. Anna Cheng says:

    I am in the process of applying for a VA loan with my husband on the purchase of our first home. The lender is denying my loan because I do not have a 2-year employment history. My husband was in the military (no longer active) and we have 3 children. I have been traveling with him throughout the years while he was in the military and therefore did not hold a real job until a little over a year ago. Is there any hope for us? Any guidance will help. Thank you.

  4. Chris says:

    I guess this is all up to the underwriter, but I wonder if you have a general idea of how they would look at a recent college graduate who has just started a job. Would they look at the type of degree and job? I will soon be graduating with a Petroleum Engineering degree and the jobs are lucrative and plentiful and I would be looking to buy a house soon after landing a job.

    • Joe Wallace says:

      Some types of specialized training and education can be considered by the lender is such cases, yes. It’s a good idea to discuss your options and circumstances with a lender–you can also try getting pre-approved at http://www.VAloans.com (a private company and not a government website).

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