These are some of the lenders who can help with a VA loan with bad credit. We can help you to find the lender who can help you by completing the short loan scenario form. This means you cannot apply directly with them. They do not work directly with the public but instead use a broker network. The lenders who can help with credit scores down to 500 are typically mortgage wholesalers. We will outline a few of those below and will describe what their credit requirements are. The larger and most recognizable lenders in the industry do not accept lower credit scores. Lenders who Can Offer a VA Loan with Bad Credit Lenders do not have an appetite for dealing with late payments and starting the foreclosure process is not good business for VA lenders. It is for this reason why lenders have their own credit score minimums.īorrowers with lower credit scores typically struggle to make debt payments which is why their credit scores are lower. They are also in the business of making money and if the borrower is not making the mortgage payments, then the lender still has some risk. The coverage against loss is good for the lenders but they are still not covered 100%. The amount they are insured for by the VA based upon your entitlement calculation so it is not a 100% coverage or guarantee by the VA. VA lenders are protected from part of the loss in the event of a foreclosure or default. Why Some VA Lenders do Not Accept Poor Credit If the DTI or purchase price are very high, the lender may ask for a down payment.