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Many Eugene/Springfield Oregon veterans are wondering whether or not they can buy a home and get a VA loan if they have gone through foreclosure. Because foreclosures in Eugene/Springfield Oregon, like the rest of the country have been high and veterans have not been immune to this, it is a very valid question.

Fortunately for veterans, the VA qualifying guidelines do allow for veterans and military personnel to qualify quicker for a VA loan after a foreclosure than conventional financing, but with some restrictions.

For starters, veterans are not eligible for a VA loan for two full years after their foreclosure. After this time veterans are allowed to apply for a loan, but will face increased scrutiny and will likely have to respond to more questions during the application process.

Another kicker here is that if the automated underwriting system (AUS) does not recognize the foreclosure or does not approve the loan, it must be underwritten manually which requires a three year waiting period. Additionally, a foreclosure, deed in lieu of foreclosure and short sale are all considered the same.

Remember, while you are eligible to apply for a VA loan after two years, there are additional requirements that must be met which may vary by lender. Simply waiting out the recovery period does not guarantee you loan approval.

Also keep in mind that this rule does not only apply to veterans who previously had a VA loan. Even veterans who have had conventional mortgage foreclosures are subject to the same regulations.

For veterans who do have a recent foreclosure that involved a VA loan, there are additional restrictions.

First, to restore full entitlement after a VA loan foreclosure, the borrower has to completely pay back the VA the loss of the previously guaranteed amount.

It is possible to use partial-entitlement to get a VA loan, but without full entitlement a down payment will probably be required. Borrowers with past foreclosures will also be asked to provide details regarding the circumstances. If you can show that the cause of your financial trouble and foreclosure were largely out of your control, you may be able to increase your chances for approval.

Some examples of extenuating circumstances include

• Unforeseen medical bills.
• Job loss
• Certain lawsuits

Examples of circumstances which probably won’t be considered to be extenuating are:

• Bankruptcy because of an entrepreneurial business venture
• Getting divorced
• Certain lawsuits

Regardless of the scenario, there is no guarantee of approval or denial as decisions are made on a case-by-case basis.

Lastly, even though the VA does not disqualify veterans from VA loans after a foreclosure, it can definitely make the application process take longer than it normally would.

Navigating the mortgage approval process doesn’t have to be daunting. With me on your side those hurdles can be overcome. I am available right now to help you with the loan process and know the ins and outs of FHA, VA, USDA and conventional financing. If you want to buy a home using an FHA loan or refinance using VA, I am here to help. Contact me at Alpine Mortgage Planning, 1200 Executive Pkwy., Ste. 100, Eugene OR 97401, 541-342-7576/541-221-3455 cell or by e-mail. Only you can make the choice it is time to get the process started.