How Underwriters Currently Treat Income for VA Loans

We are fortunate to live near several Military Bases, and we are working with several folks who are using their VA benefits to purchase homes.  Mortgage loans backed by the Veterans Administration are 100% loans based on the homes value, and do not generally carry location restrictions like USDA loans do…

We sell our loans to many different banks, and this give us great pricing and great flexability… and is also showing us that underwriters are looking at BAH and BAS pay (along with other income) differently across the board.  Since this definitely affects how much home you can qualify to purchase, I figured I’d share what we are seeing TODAY, so that you can be prepared.

At least 2 of the banks we send business to allow BAH and BAS if there is no available base housing in the subject property area. (this is checked by location of the base and by a letter from a commanding officer) Other income can not be used with these banks… 

A couple of other banks, will allow BAH and BAS (no matter where the property is located).  Any other military income (submarine income, seaman pay, etc) can be used if we prove that it’s going to continue based on your assigned duties.

Still OTHER banks are underwriting loans and allowing the BAH and BAS (regardless of location), but they require that we prove any additional income is likely to continue for 3 more years… and another underwriter (different bank) also wants a 2 year history of receiving the income.

In other words, they are all over the place.  If you are purchasing a home and using your VA benefits, we suggest that you find a professional who is familiar with the Underwriting Guidelines used TODAY… because there’s no real standard.  Call Steve Thorne, 919-649-5058 for more information!