Can I Get An Idaho VA Loan If I’ve Had A Recent Foreclosure?
Many veterans today are wondering whether or not they can get an Idaho VA Mortgage loan if they have recently been through a foreclosure.
Fortunately, the VA qualifying guidelines do allow for veterans and military personnel to qualify for an Idaho VA loan after a foreclosure, but with some restrictions.
For starters, veterans are not eligible for a VA loan for 2 full years after their foreclosure. After this time veterans are allowed to apply for a loan again, but will face increased scrutiny and will likely have to respond to more questions during the application process.
Remember, while you are eligible to apply for a VA loan after 2 years, there are additional requirements that must be met which may vary by lender. Simply waiting out the recovery period does not guarantee you loan approval.
Also keep in mind that this rule does not only apply to veterans who previously had a VA loan. Even veterans who have had conventional mortgage foreclosures are subject to the same regulations.
For veterans who do have a recent foreclosure that involved a VA loan, there are additional restrictions.
First, to restore full entitlement after a VA loan foreclosure, the borrower has to completely pay back the VA the loss of the previously guaranteed amount.
It is possible to use partial-entitlement to get a VA loan, but without full entitlement a down payment will probably be required. Borrowers with past foreclosures will also be asked to provide details regarding the circumstances. If you can show that the cause of your financial trouble and foreclosure were largely out of your control, you may be able to increase your chances for approval.
Some examples of extenuating circumstances include:
- Unforeseen medical bills.
- Job loss.
- Certain lawsuits.
Examples of circumstances which probably won’t be considered to be extenuating are:
- Bankruptcy because of an entrepreneurial business venture.
- Getting divorced.
- Certain lawsuits.
Regardless of the scenario, there is no guarantee of approval or denial as decisions are made on a case-by-case basis.
Lastly, even though the VA does not disqualify veterans from VA loans after a foreclosure, it can definitely make the application process take longer than it normally would.
Frequently Asked Questions:
Q: Are the children of a living or deceased veteran eligible for the home loan benefit?
No, the children of an eligible veteran are not eligible for the home loan benefit.
Q: How can I obtain proof of military service?
Standard Form 180, Request Pertaining to Military Records, is used to apply for proof of military service regardless of whether you served on regular active duty or in the selected reserves. This request form is NOT processed by VA.
Rather, Standard Form 180 is completed and mailed to the appropriate custodian of military service records. Instructions are provided on the reverse of the form to assist in determining the correct forwarding address.
Q: Is the surviving spouse of a deceased veteran eligible for the home loan benefit?
The unmarried surviving spouse of a veteran who died on active duty or as the result of a service-connected disability is eligible for the home loan benefit.
If you have any questions about VA mortgage loans please feel free to contact us.
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