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VA Loans & Late Payments

Borrowers seeking a VA Loan who have a history of late payments that are reflected in their credit may have difficulty obtaining loan approval. Lenders often look for candidates with a history of timely repayment on all credit obligations, which will reflect their willingness to repay future obligations, such as a VA loan.

However, individuals with a history of late payments are not automatically disqualified. Satisfactory credit can typically be restored after 12 months of continuous on time payments. The 12 month period begins after the date of the most recent delinquent payment. Additionally, the borrower’s full credit history is reviewed, taking into account the comprehensive credit behavior of each individual. Therefore, isolated incidents of delinquent payments may not prevent an individual from being approved for a VA loan if suitable explanations can be provided.

Once the loan has been obtained, it is important that borrowers make their loan payments on time. Perpetual late payments can result in foreclosure and judgment against the borrower. If the individual knows that the payment cannot be made for unavoidable reasons (such as illness, divorce, job loss, etc.) the lender should be contacted immediately with an explanation for the delinquency. In some cases, the lender can work with the borrower to arrange a repayment plan in hopes of avoiding foreclosure.

Back to the Veterans' Loan Handbook Table of Contents.