Do you only offer VA loans?

I am a full service mortgage broker. Although VA is the majority of what I do, I also have other mortgages like FHA, Conventional, USDA and Non QM.

Do you only service the Dayton and Cincinnati markets?

Dayton and Cincinnati are the majority of my business. However, I'm authorized to offer mortgage loans in 40 states. For loans outside of these areas, I can refer them to friends in the business.

Bad Credit VA Loan After Divorce: What You Need to Know

Key Takeaways

VA Loan Guidelines on Divorce and Credit:

Divorce itself is not considered an “extenuating circumstance” by VA guidelines. However, specific events tied to a divorce might qualify under certain conditions.

Understanding the One-Year Rule:

VA guidelines generally focus on credit issues within the past year. If the bad credit event occurred more than a year ago, it’s often not a barrier to approval.

Lender Selection Matters:

Many lenders impose additional rules (lender overlays) on top of VA requirements. Working with a broker who has access to low or no-overlay lenders can significantly increase your chances of approval.

Take the 30 second mortgage quiz to see if you qualify

Common Scenarios and What You Can

Bad Credit Over a Year Old

If your credit issues occurred over a year ago and have since been resolved, VA guidelines generally consider you in good standing. Minimal documentation may be required, especially with a no-overlay lender.

Bad Credit Within the Last Year

For recent credit issues, VA loans may still be possible if the problem can be tied to an extenuating circumstance. Unfortunately, VA guidelines specifically exclude divorce itself as a valid reason. However, there are exceptions:

Child Custody Battles: If the custody issue involves safety concerns (e.g., abuse or neglect), it may qualify.
Written Agreements Broken by an Ex: If your ex was legally responsible for a debt (e.g., car payments) and failed to pay, this could be excluded from your credit evaluation if documented in a divorce decree.

Financial Strain During Divorce

Legal Fees: Unfortunately, going into debt to pay for legal representation doesn’t qualify as an extenuating circumstance.
Alimony and Child Support: If high payments prevent you from paying other bills, this also doesn’t meet the VA’s criteria for extenuating circumstances.

Take the 30 second mortgage quiz to see if you qualify

Credit Damage from Joint Debt

Joint debt that your ex-spouse was assigned responsibility for in the divorce can be tricky. If their failure to pay is documented in the divorce decree, you may still qualify for a VA loan by excluding that debt.

Why Expertise Matters

Navigating VA loan rules after a divorce is highly specialized. Many lenders, especially large online ones, may not have the expertise to handle complex cases like these. Working with a knowledgeable mortgage broker can make all the difference.

If you or someone you know is dealing with bad credit due to divorce, don’t hesitate to reach out. I’m licensed in most states and have extensive experience with VA loans and credit challenges.

For more information, click here to contact me.

Licensing Info

I can originate VA mortgage loans anywhere that I’m licensed. I’m licensed in Alabama, Arkansas, Arizona, California, Colorado, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Michigan, Minnesota, Mississippi, Missouri, New Mexico, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, Washington, and Wisconsin. Additionally, our team can originate mortgages in several additional states through our corporate referral program.

How To Get A VA Home Loan With Bad Credit

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Carlos Scarpero

Carlos Scarpero is the founder of Scarpero.com and a mortgage loan officer focusing on VA and Non QM mortgage loans. He is also the author of VA Loans Made Easy.