Direct VA Loans

VA Home Loan Underwriting

It’s common to see or hear the terms “underwriter” and “underwriting” when applying for a VA loan. ;So, what is a VA loan underwriter and what is the VA underwriting process? ;

The VA loan underwriter verifies whether every aspect of the VA mortgage loan meets the guidelines of the VA Home Loan Guaranty Program. ;All VA loans are underwritten to VA guidelines. ;Often VA-approved lenders who make the actual VA mortgages have guidelines in addition to those of the VA. It is the underwriter who ultimately determines whether a VA loan application is accepted or rejected.  

VA and lender guidelines are well in place before a borrower begins the VA loan application process. And, each applicant must meet the pre-established criteria. An effective loan officer is knowledgeable about these guidelines and is skilled at doing a thorough screening prior to any loan application being submitted to underwriting.

The underwriter checks that certain requirements are met by both the borrower and the property in order for a loan to be accepted.  In fact, VA loan underwriting is mostly formulaic. In general, some of the requirements for obtaining a VA loan are:


  • The applicant must be VA-eligible with available entitlement. 

  • The loan must be made for an eligible purpose. 

  • The borrower must occupy or intend to occupy the property within a reasonable period of time after closing the loan. 

  • The borrower must present a satisfactorily low credit risk. 

  • The income of the military member and spouse, if any, must be shown to be stable and sufficient to meet the mortgage payments, cover the costs of owning a home, take care of other obligations and expenses, and have enough left over for family support. An experienced mortgage lender will be able to discuss specific income and other qualifying requirements.

  • The appraised value of the property must justify the value of the loan.

More specifically, in order for a borrower to be considered a satisfactory credit risk by the VA, a borrower should have:

  • Debt-to-income ratio of 41%

  • No liens for government debts

Lenders may use VA loan underwriters employed by the Department of Veterans Affairs at a local underwriting center. Some larger VA-approved lenders may have their own VA loan underwriters in house. The benefits of an in-house VA underwriter can include convenience in person-to-person discussions between the loan officer and the underwriter about details of an application. In other words, a VA loan professional may be able to simply walk down the hallway and get a question answered on the spot, rather than wait for a call to be returned.

VA mortgage underwriters are specially certified

Whether employed by the VA or by the lender, VA mortgage underwriters must have the required education and certification in order to analyze information for VA loans. Once underwriters are certified, they are able to make decisions about the loan process for people who need VA mortgages. 

Underwriters review VA loan applications on a case-by-case basis.  That said, there are automatic underwriting systems approved by the VA that lenders can use in connection with VA loans.  The two most used systems are Loan Prospector and Desktop Underwriter.  Loans that cannot be approved automatically must be manually underwritten.  Things that might prevent a loan from being approved automatically can include:


  • Joint applicants

  • A recent history of foreclosure or bankruptcy

  • Lacking or insufficient credit history

There may be an underwriting fee associated with each VA loan application which can very from lender to lender. To find out more about VA underwriting, contact a VA loan professional.

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