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VA Income Requirement Guidelines are similar to
other programs. This is not an inclusive list
of items needed. Documentation may be more of
less per Lender requirements or through the use
of automated underwriting engines such as
DO/DU(FNMA) or LP(FHLMC)
Employment verification
general requirement
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Verify a minimum of 2 years employment.
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If not employed by the present employer less
than 2 years:
Verify prior employment plus present
employment covering a total of 2 years;
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Gaps of employment great than 30 days may
need explanation
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Current paystubs for 1 months time period.
Paystub must contain YTD information.
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W-2 forms for the past 2 years
or
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Provide an explanation of why 2 years
employment could not be verified.
Borrowers that are self employed will need to
provide the following:
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Tax Returns for the last 2 years (including
person, business, partnerhsips)
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YTD Profit and Loss Statement
VA’s debt-to-income ratio is a ratio of
total monthly debt payments (housing expense,
installment debts, etc.) to gross monthly
income is generally 41%:
Though Debt Ratios may exceed the 41%, if not
approved through and automated underwriting
engine such as DO/DU(FNMA) or LP(FHLMC) then
and underwriter will be looking to make sure
that there are some compensating factors.
In addition, underwriter need to review and
verify that there is sufficient residual income
for family support available for the Veteran
after making the loan.
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COMPENSATING FACTORS
Compensating factors may
affect the loan decision. These factors are
especially important when reviewing loans which
are marginal with respect to residual income or
debt-to-income ratio. They cannot be used to
compensate for unsatisfactory
credit.
Valid compensating factors
should logically be able to compensate (to some
extent) for the identified weakness in the
loan. For example, significant liquid assets
may compensate for a residual income shortfall
whereas long-term employment would not.
Compensating factors
include, but are not limited to the
following:
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Excellent credit
history
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Conservative use of
consumer credit
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Significant liquid
assets
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The existence of equity
in refinancing loans
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Little or no increase
in shelter expense
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Satisfactory
homeownership experience
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Low debt-to-income
ratio
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Tax credits for child
care, and
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Tax benefits of
homeownership.
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Qualifying 
