Why would the VA not approve a loan? (2024)

Why would the VA not approve a loan?

Property Problems

What will cause VA loan to get disapproved?

A common hurdle for many self-employed VA loan borrowers stems from inconsistency in their income. Remember, the underwriter is here to verify you can repay the loan. If your tax returns show an insufficient amount or heavily fluctuating income, it can trigger additional scrutiny or a denial.

Why would I get denied for VA loan?

If you submitted your application to a lender, supplied your documentation and your credit was reviewed, if you didn't get your approval once you found a property, it's likely your VA loan officer made a mistake somewhere or the information you provided on your application couldn't be verified.

What can stop you from getting a VA loan?

What are red flags for VA loan?

Red flags include the presence of radon gas, asbestos or lead-based paint within the home, or properties located in a flood zone, near a sinkhole, or proximity to any type of environmental contamination.

What is the most common reason that VA erroneously denies claims?

Inadequate information provided in your claim—it's very possible that you simply didn't provide enough medical evidence in your disability claim for the VA to make an informed decision regarding your true level of disability.

Do people get denied VA loans?

In some instances, if your lender is not approved for manual underwriting on VA loans, they could deny your application. It's important to remember that you have options, even if your application for a VA loan is disapproved.

Is it hard to get VA loan approved?

The government guarantees these loans, so it's typically easier to qualify since there's less risk for lenders. In fact, it's possible to get a VA loan with no down payment — and you may qualify if your credit isn't strong or you've had a history of foreclosures.

Can a VA loan be denied after closing?

Can My VA Loan Still Be Denied After Clear to Close? While it's very rare for a lender to deny a loan at this point, it can happen. In most cases, a denial after being cleared to close happens due to a major change in your financial circ*mstances.

How often are VA benefits denied?

The Veteran Affairs website reports that 75 percent of all initial applications for VA benefits are denied. These applications are often denied because they have incomplete information or lack necessary documentation. Other reasons for denial include: Not enough evidence to support your disability.

How much house can I afford if I make $36,000 a year?

On a salary of $36,000 per year, you can afford a house priced around $100,000-$110,000 with a monthly payment of just over $1,000. This assumes you have no other debts you're paying off, but also that you haven't been able to save much for a down payment.

What is the max VA loan amount?

About VA Loan Limits

The standard VA loan limit in 2024 is $766,550 for most U.S. counties, increasing from $726,200 in 2023. VA loan limits also increased for high-cost counties, topping out at $1,149,825 for a single-family home. VA loan limits do not represent a cap or max loan amount.

How long does it take for underwriters to approve a VA loan?

The timeline for underwriting can vary depending on several factors, but it generally takes somewhere between three to six weeks to complete. The time it takes for underwriting can be influenced by the complexity of your financial situation, the volume of loans being processed by the lender and other relevant factors.

Why would a house not qualify for VA?

Common issues that can prevent a home from passing a VA appraisal are: bad roof, peeling exterior paint, rotten wood on decks and stairways, water in the basem*nt, foundation problems, faulty electrical systems, etc. In other words, the home must be in good livable condition and cannot be a “fixer-upper” property.

How hard is it to pass a VA appraisal?

It's common for sellers to feel worried about meeting the MPRs. But as long as they've taken care of the property, appraisers will likely pass the property. If the appraiser finds any issues, the seller could fix the issues so that the property passes the VA appraisal.

What do VA underwriters look for?

It is the underwriter's objective to identify and verify income available to meet: • the mortgage payment, • other shelter expenses, • debts and obligations, and • family living expenses.

How often do VA loans get denied?

How Often Do Underwriters Deny VA Loans? About 15% of VA loan applications get denied, so if your's isn't approved, you're not alone. If you're denied during the automated underwriting stage, you may be able to seek approval through manual underwriting.

What would cause a house to fail VA inspection?

A VA appraisal may fail if the property does not meet the VA's MPRs. Some common reasons for a failed VA appraisal include the following: Structural issues: Significant structural problems, such as foundation issues, severe cracks, or unstable construction, can result in a failed appraisal.

How often are VA claims denied?

The VA denies around 30% of disability claims each year. It can be frustrating to learn that your claim for VA compensation was denied. You may feel like you did everything they asked of you and provided all the evidence necessary to get the disability compensation you deserve.

Are VA loans harder to get approved?

It's generally easier to receive a VA loan approval than a conventional mortgage because of the low credit score requirements for VA loans.

What do underwriters look for VA loan approval?

They look closely at your credit and assets to determine whether you are likely to pay back the loan; they make sure the originating loan officer packaged the file properly and that nothing is missing; and they're also in charge of ensuring the property title is clean and that the loan meets all VA guidelines regarding ...

How long does it take for the VA to approve a loan?

How long does the VA home loan process take? The whole process typically takes less than a month, from preapproval to the closing table. Once you have prequalification for your VA loan, you can start the next step in the VA home loan process — house hunting!

Are VA appraisers picky?

VA appraisers aren't necessarily harder on homes than conventional appraisers, but they do evaluate properties against different standards. The VA has strict requirements for properties it will finance, both to ensure the homeowner's safety and the property's value in the long run.

Will VA approve a home with foundation issues?

Unlike standard loans, HUD and VA programs require that a property is structurally sound. Even if the lender agrees to finance a home with foundation issues, you may have to provide a bigger down payment and pay a higher interest rate. Repairs could be costly.

Do VA loan appraisals come in low?

Sometimes, a VA appraisal comes in too low. An independent, professional appraiser visits the home and decides that the value of the home is lower than the price the buyer has agreed to pay. That's a problem because the lender isn't allowed to lend more than the home's fair market value.