VA requirements

VA Income Requirements for Loans: Verifiable Income Only

December 12, 2013

VA Income Requirements for Loans: Verifiable Income Only

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In our previous post we discussed VA loan requirements for employment and income. One thing we mentioned briefly are the VA income requirements that lenders use only “verifiable” income to calculate the borrower’s creditworthiness, plus the debt-to-income ratio. What does this mean? What is “verifiable income”?

VA Pamphlet 26-7 Chapter Four describes the VA income requirements. For non-military income, the lender must verify the borrower has (in general) a two year minimum employment history, not necessarily with the same employer or company the entire time. For that income, the lender must determine whether it can be used to qualify for the VA loan, as described in Chapter Four which instructs the loan officer:

“Identify and verify income available to meet:

  • The mortgage payment
  • Shelter expenses
  • Debts and obligations
  • Family living expenses.

Evaluate whether verified income is:

  • Stable and reliable
  • Anticipated to continue during the foreseeable future, and sufficient in amount.”

The lender is not permitted to use income that is not stable, reliable and likely to continue. That’s why GI Bill housing stipends can’t be used to qualify (those stipends run out after a specified time and are therefore not considered likely to continue) and why part-time income from activities like online sales on eBay, Etsy.com, etc. can’t be used, either. (The lender may use discretion in determining income from full-time business concerns that include these sales avenues–talk to your loan officer to learn more.)

Child support, alimony, some types of public assistance, trust fund income and other types of non-job income MAY be counted if it meets VA standards.

Spouse income may also be counted. Chapter Four says, “Verify and treat the income of a spouse who will be contractually obligated on the loan the same as the veteran’s income.” The lender is required to comply with the Equal Credit Opportunity Act in such cases when the spouse is not considered contractually obliged on the loan. However, Chapter Four says, “In community property States, information concerning a spouse may be requested and considered in the same manner as for the applicant, even if the spouse will not be contractually obligated on the loan.”

To verify income and income stability, the VA lender will request pay stubs, tax information, and other data from the applicant. Borrowers should expect to provide tax forms and the most recent pay stubs from any income they wish to use to qualify for the VA mortgage loan.

As we’ve mentioned before, there is no VA minimum income dollar amount set for loan approval, the lender must determine the borrower’s income amount, the debt-to-income ratio, and whether the borrower can afford the loan with the mortgage payment added to the current debt-to-income ratio.

Do you have questions about VA home loans? Ask us in the comments section. 

8 Comments
  1. Robert Jones

    Dear Bruce. my wife and I are current home owners in San Diego CA. My wife is due to retire in 2016 from the Navy and I'm a disabled Navy VET as well. We're currently in a chpt 13 and should be completed in 2015. We're planning to move to Arkansas after my wife retires. Do you see us having a problem with getting a VA loan for our new home in Ark and can you provide some advice as to what we should be working on now to make sure we're able to get a loan?

    • Joe Wallace

      It's difficult to say whether a VA loan would be considered or not--different lenders have different requirements. Your best bet is to work on reestablishing good credit and a history of reliable payments to the time your loan application is turned in. When you're ready you can apply for a loan or explore your pre-approval options at www.valoans.com (a private company and not a government website.)

  2. Christina Whoolery

    My husband and I own a home in CO using a conventional loan. When we were relocated, we opted to turn that property into a rental. However, the loan did not change, and is still a main residence. If we opt to buy in NY and we still own the property in CO, can we still qualify for the VA loan? I was not sure if there is an issue with already having a primary residential loan.

    • Joe Wallace

      VA loan rules do not prevent a borrower who has a conventional mortgage already from applying for a VA mortgage. The VA loan rules state that any property purchased with a VA guaranteed mortgage must be the borrower's primary residence--it must be personally occupied by the borrower unless it has been refinanced with a VA Streamline Refinance Loan. The real issue would be whether or not the borrower can afford the new VA loan under debt-to-income guidelines, but if that is not a problem, the borrower would only be subject to the typical home loan credit qualifying process.

  3. DONALD LUKICH

    CAN I GET A VA LOAN,WHEN I HAVE NEVER APPLIED FOR CREDIT,PAID CASH ONLY!

    • Joe Wallace

      Are you an eligible veteran?

  4. william zissovitis

    can you get a va loan if there is judgement against you or pending

    • Joe Wallace

      That may depend on a variety of factors including the nature of the judgment.

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