Bankruptcy and VA Loans

You must be an eligible veteran to qualify for a VA loan; eligibility is determined by credit history and other factors.

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If you are a veteran who has a history of bankruptcy, please note:

• If the bankruptcy was resolved more than 5 years ago, it may be disregarded entirely. The veteran is considered a satisfactory credit risk, and the loan would be processed like any other VA loan.
• If the bankruptcy was discharged 3 to 5 years ago, the veteran may be considered a satisfactory credit risk, and it is likely that the veteran will be able to obtain a VA loan.
• If the bankruptcy occurred less than 3 years ago, it is likely that the veteran will not be considered a satisfactory credit risk, and, therefore, will not qualify for a VA loan.
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If the veteran has declared bankruptcy within the last 5 years, they still may obtain a VA Loan if:

• The veteran (and/or his or her spouse, if applicable) can demonstrate that he or she has purchased items with credit since the bankruptcy
• any outstanding debts have been paid in an acceptable manner
• The bankruptcy occurred due to circumstances beyond the borrower's control

The credit standards adopted by the VA meet the minimum criteria to which mortgage companies must adhere. Other companies may have more strict standards than the VA , so borrowers should conduct their own research.

Each person's situation is unique, so borrowers should contact the Department of Veterans affairs or their mortgage company for information specific to their particular situation.