VA Loan Reader Questions: Why Can’t I Use My VA Home Loan Benefits?
A reader asked us recently, “I bought my first home using a VA loan. I was honorably discharged. I was approved for a two week early release and was told I would receive my full benefits. The home I’m living in now is through an FHA loan because I was told that I was not approved for a VA loan. I served two weeks shy of two years active duty and was approved for early release with the understanding I would receive my benefits. Is there anything I can do about this or was my time in the Navy for nothing?
The most important thing to understand about this particular question is that VA loan eligibility–the fact that a borrower is eligible to apply for a VA guaranteed home loan–is not the same as VA loan approval. Borrowers must submit to credit checks, employment verification and other qualifying measures in order to be approved for a VA mortgage loan.
The borrower who does not qualify because of a credit score issue, lack of verifiable income or other factors will be turned down by a participating VA lender. The same is true for a borrower who has successfully borrowed in the past but has not applied for VA loan eligibility restoration (though the borrower should be advised by his or her lender to apply for this restored eligibility in such cases).
That’s not to say that our reader has any of these issues–it’s simply to point out that there are many reasons why a borrower who is eligible to APPLY for a VA guaranteed home loan could be denied a mortgage loan.
There are no details provided that could give a clue as to why this particular loan application was turned down, and it’s not our place to determine whether or not the reader is a suitable applicant. Borrowers should take steps prior to applying for a VA guaranteed home loan to make sure they have the right credit scores, that there is no erroneous information on their credit report, and other actions that can help pave the way to a successful VA loan application.
Best advice in this case? Call the Department of Veterans Affairs and ask to speak to someone about your specific circumstances. Contact the VA at 1-800-827-1000.