VA LOAN CAPTAIN BLOG & Learning Center

The VA and “Two Most Recent” Mantra

By: Grant Moon 07/31/14 10:56 am

The number “2” has a very special place in the hearts of VA lenders. It’s quite a popular number and if you’re about to apply for your very first VA home loan you’ll hear it bandied about quite a bit. Yet even though it sounds sort of silly it’s really an important number.

Your loan officer will ask you for all sorts of documentation, signatures and initials and will also ask for your two most recent paycheck stubs covering 30 days. Note, that’s a 30 day period. If you get paid every other week, two pay check stubs won’t cut it. When VA lenders determine affordability, they compare your gross monthly income with your current monthly credit obligations. If you get paid once per month, you can skip this “2” requirement.

A two year employment history is also a lender favorite. You’ll need to document two years of consistent employment most often satisfied with your two most recent W2 statements. The income on the W2 forms must be relatively consistent. If there is a large gap in earnings, it could mean you weren’t employed fully for two years. If you have part time income, you’ll need to validate two years’ worth. Of course, if you’re recently discharged or have been in school, a copy of your DD-214 or transcript will satisfy the two year history.

If you’re self-employed or receive income other than from your employer and plan to use that income to qualify for a VA loan, the VA lender will ask for two years’ of federal income tax returns. For the self-employed or those who receive dividend or interest income, VA lenders need to again see a two year history of consistent self-employment and other income on those tax returns.

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