What Credit Score Do You Need for a VA Loan?

Many first-time buyers assume their credit isn’t strong enough to qualify. Fortunately, VA loans are often more flexible than conventional financing.

Technically, the VA does not set a minimum credit score. However, most lenders apply their own guidelines. In today’s market, you’ll typically see minimum scores between:

• 580 and 640
• Most commonly around 620

That flexibility makes VA loans especially helpful for younger service members who may not have a long credit history yet.

More importantly, a good VA-focused lender won’t just deny you if your score needs work. Instead, they’ll show you exactly what to improve and how to qualify.

Can You Use BAH and Disability Income to Qualify?

Yes — in most cases.

Basic Allowance for Housing (BAH) and Basic Allowance for Subsistence (BAS) can help you qualify because they directly support your housing expenses.

Additionally, VA disability income typically counts toward qualifying income if it can be properly documented.

That combination often strengthens purchasing power for first-time military buyers.

What Do You Need to Get Started?

The process is more straightforward than many people think.

First, you need to confirm eligibility through your Certificate of Eligibility (COE). Fortunately, an experienced VA lender can usually pull this for you quickly.

From there, expect to provide:

• Recent pay stubs (usually 30 days)
• W-2s or tax returns (if self-employed)
• Two months of bank statements

Documentation for any funds used toward closing

If you’re self-employed, you’ll also provide business and personal tax returns.

Once you gather these items, the rest becomes a structured, step-by-step process.

The Biggest Financial Benefits of a VA Loan

For first-time buyers, VA loans remove some of the biggest obstacles to homeownership.

First, there’s zero down payment in most cases. That alone eliminates one of the largest barriers to entry.

Second, VA loans do not require monthly mortgage insurance (PMI). Conventional and FHA loans typically include it, which increases your monthly payment.

Additionally, VA interest rates are often slightly lower than conventional rates, although market conditions can change.

Together, these benefits create:

• Lower upfront cash requirements
• Lower monthly payments
• Greater affordability

For someone buying their first home, that combination can make a significant difference.

What About Closing Costs?

Another common misconception is that you can simply roll closing costs into the loan.

That isn’t exactly how it works.

Instead, many buyers negotiate with the seller to cover some or all closing costs. VA guidelines allow sellers to pay normal and customary closing costs and up to certain concession limits.

That strategy can dramatically reduce out-of-pocket expenses at closing.

Understanding the VA Funding Fee

The VA funding fee often confuses first-time buyers.

This one-time fee goes directly to the Department of Veterans Affairs. It helps guarantee the loan program and replaces traditional mortgage insurance.

Most borrowers roll the funding fee into the loan rather than paying it out of pocket.

Importantly, veterans with a service-connected disability rating of 10% or more are typically exempt from paying the funding fee.

Common Misconceptions About VA Loans

Over the years, a few myths have discouraged buyers from using their VA benefits.

Some believe VA loans are harder to qualify for. In reality, they follow full documentation guidelines just like most modern loan programs.

Others assume VA appraisals are overly strict. While VA appraisers ensure the home meets safety, soundness, and sanitation standards, those requirements usually align closely with conventional standards.

There was also a period when sellers hesitated to accept VA offers due to the VA “escape clause.” However, that clause simply protects veterans from overpaying if a home fails to appraise. It doesn’t make VA buyers weak — it protects them.

Can You Build Wealth with a VA Loan?

Absolutely.

Every payment builds equity. Additionally, if you receive PCS orders or relocate, you may be able to keep your existing home as a rental and use remaining entitlement to purchase another primary residence.

Many veterans don’t realize this flexibility exists.

While VA loans are not designed to create real estate empires, they absolutely can help you:

• Build equity
• Leverage rental income after relocation
• Transition into larger homes as your family grows

When used strategically, a VA loan becomes a long-term wealth-building tool.

Why Working With a Local VA Expert Matters

VA loans include nuances that not every lender understands.

Local market knowledge also plays a major role. In Brevard County, for example, lenders regularly work with veterans stationed at Patrick Space Force Base and employed at major aerospace employers.

An experienced local lender understands:

• Military income structures
• PCS timelines
• Local appraisal trends
• Florida-specific underwriting nuances

At Morgan Financial, we are veteran-owned, veteran-focused, and deeply experienced in VA lending throughout Florida. That experience keeps transactions smooth and helps first-time buyers avoid costly mistakes.

Final Thoughts

So, are VA loans good for first-time home buyers?

In most cases, they’re one of the strongest loan options available.

They reduce upfront costs, eliminate monthly mortgage insurance, offer competitive rates, and provide long-term flexibility.

If you’re a Florida veteran or active-duty service member thinking about buying your first home, the key is simple: structure the loan correctly from the beginning.

👉 Reach out to Morgan Financial today to review your eligibility and build a smart, confident homeownership plan.