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Does a VA home loan, help people with bad credit? Can you purchase a HUD home with a VA mortgage?

home mortgage loan credit
photofemale810 asked:


There is an HUD home for around $30000, my husband an i are thinking about purchasing, we’d need a mortgage for around $50000. We don’t have good credit, can a VA loan help with that? Any other suggestions?
Just to clarify, the house is valued at $78000, but has been on the market for 2 years, which is why the broker has lowered the price to 30000.

Rosa

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This entry was posted on Thursday, August 7th, 2008 at 11:54 pm and is filed under Renting & Real Estate. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

3 Responses to “Does a VA home loan, help people with bad credit? Can you purchase a HUD home with a VA mortgage?”

  1. xstitchmama says:
    August 8, 2008 at 8:54 pm

    A VA loan will let you buy a house with no money down, but I think there are still credit requirements. My husband is eligible but still had something bad on his credit - a collection or something- and we were told we had to wait til it was taken care of. If you have a mortgage broker nearby, one that works with several differerent lenders, they will meet with you, often for free, take a look at your credit and tell you what they can do, or what needs to be done before you will be eligible for a loan.

  2. Landlord says:
    August 9, 2008 at 12:07 am

    It can help, they are less strict, it just depends on how bad is bad.

    However, there is no way in hell anyone would lend you 50k to buy a 30k house. Even with bright shiny perfect credit this would not be happening.

    The maximum mortgage you could possibly qualify for 30k, purchase amount, but even that much is not likely with bad credit. 24k for the 30k house is more likely.

  3. Expert Realtor says:
    August 10, 2008 at 2:15 am

    VA home loans are not credit score driven, but banks that fund these loans do have minimum credit guidelines for people with BAD credit (which is very different from no credit).

    Most banks have a 585 minimum mid-score guideline, if you can’t meet that, they won’t underwrite the loan, period.

    A VA loan is simply a loan that is insured. It not a free-for-all subprime alternative.

    PS: No bank, no loan program, allows you to borrow more than the house is worth.

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