How do VA home loans work? Who is lending the money?

One of the most common misconceptions with VA home loans is that the VA is actually loaning the money. The way it works is the VA guarantees a portion of each Veterans’ loan and sets the guidelines for the program. Individual lenders are allowed to participate and loan their own money to veterans as long as they follow the guidelines set forth by the VA. Lenders are free to add their own conditions but they must also follow the ones set by the VA. For instance the VA doesn’t set a minimum credit score for borrowers. Each lender sets their own criteria. That’s why if a Veteran has a 620 credit score some lenders will loan to them but others won’t. I hope this helps and if you have any questions please feel free to call or email me.


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