VA LOAN CAPTAIN BLOG & Learning Center

Do You Need A Job For A VA Loan Approval?

By: Grant Moon 07/02/14 10:47 am

That seems like a silly question, doesn’t it? VA loan approval guidelines have remained pretty much the same over the past seven decades and weren’t tempted like other mortgage loans to alter their approval guidelines that helped create the housing crisis. Fannie, Freddie and FHA all attempted to attack the subprime loan market to some degree in the last decade and began to offer mortgage programs to those with poor credit or who could not document their income. Some loan programs didn’t even require a borrower to document employment at all, much less have a pay check stub. But the VA held firm and refused to alter their guidelines.

One of the guidelines is that you must be able to afford the new mortgage in addition to current monthly credit obligations. Should the new mortgage payment, including taxes and insurance be $2,000 and there are two credit card payments adding up to $200 per month, VA loans require that the veteran show enough income to comfortably afford the monthly payments and is validated by comparing gross monthly income with monthly debt. But note that the guidelines don’t require you to have a job, it requires you to have income. How can that be?

It becomes clear when you realize that employment isn’t the only acceptable form of income. Retirees can have a pension and social security. There can be income from retirement funds or other investments. Borrowers who receive child or spousal support can use such income. VA lenders need only to make the determination that the income is currently being received and has a likelihood of continuance for at least three years. Some types of income must be documented of having been received for at least two years but most emphasis is placed on the probability of continuance. VA loans don’t require employment, but they do require solid evidence of income.

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