If you obtained a VA loan and your property was foreclosed on, you might be considering purchasing a new home. Consider the steps you’ll have to take to see whether you can obtain a VA loan after foreclosure.
The government works very hard to accommodate its military members and the VA loan as a means of achieving home ownership is an important part of the benefits you can receive, but its not without an expectation that the government wont lose money on the deal. If you’ve experienced a foreclosure, you should first speak with someone at the VA and find out whether it’s likely that your home loan benefits will be restored before assuming that they will or will not be restored.
As a rule of thumb, you’ll have to repay money lost by the government on your foreclosure. The amount can vary, but if your property was foreclosed upon, you should find out how much the VA expects you to repay in order to be eligible for another VA loan after your foreclosure.
One of the hurdles to getting a second VA loan will be that you need to prove yourself able to pay on the second loan you receive, if you receive it. This means that anything you can do to improve your credit and employment income will be helpful in obtaining the new VA loan. Simply because you clear up the amounts you owed on the prior VA loan doesn’t mean you’ll automatically get the new loan.
If you are unable to repay the debt you owe to the VA and your property is foreclosed upon, you may still be eligible for a debt waiver. While you should contact the VA to make sure of the process, the first thing you’ll want to pay attention to is whether the reasons for the foreclosure on your property are of the type that the VA is likely to grant a debt waiver for. For instance, simple bad judgment would not likely succeed as sufficient grounds for you getting a debt waiver so that it wouldn’t be worth your time to go through the bureaucracy of seeing whether you could get a debt waiver.
If you are considering trying to get a debt waiver, you will have a hearing opportunity where you can present evidence of how specific circumstances led to the foreclosure. It should be noted that spouses of veterans can take advantage of the option for repairing, getting a waiver and ultimately obtaining a new VA loan.
Even if you are not granted full debt forgiveness by the VA after you apply for a debt waiver, you might get a partial debt waiver which will make it easier for pay off the amounts you owe making it that much easier for you to get a new VA loan.
Usually, you will have to wait, 36 months after a foreclosure to try to get a new VA loan. However, you should always consult with a VA approved lender directly because there are ways of shortening that wait period in certain circumstances.
Obtaining a new VA loan after a foreclosure is not impossible, but there will be issues that you’ll have to consider. Use the recommendations above for taking steps to get a second VA loan after a foreclosure.