Best VA Loans for Bad Credit in 2020

One of the great perks about serving in the military or having served is the ability to use the Veterans Assistance loan. VA loans give you the ability to get into a house with no money down and no private mortgage insurance. But if you have bad credit, you may be concerned if you can still take advantage. Luckily, bad credit VA loans do exist through certain lenders.

Mortgage Rate Comparison Tool

The 5 best VA loans for bad credit

Lender Min. Credit Score 30-Year APR Key Benefit
Freedom Mortgage 620 Not listed Helpful affordability and purchase tools
Veterans United 660 3.021% Highest volume of loans approved
Veterans First Mortgage 620 Not listed Offers FHA and USDA options
Navy Federal Not listed 3.195% Offers additional banking services
USAA 620 3.971% Offers jumbo loans and ARMs


The 5 best VA loans for bad credit of 2020

Freedom Mortgage – Best for the worst credit

Around for over 25 years, Freedom Mortgage continues to offer quality service for traditional loans and for VA loans. Since its founding in 1990, the company has provided mortgage services for over 1 million satisfied customers. On the company’s website, it discusses how most VA lenders are only willing to work with buyers that have, at the very least, a 620 credit score. But Freedom Mortgage goes on further to state that it is willing to work with someone with a credit score lower than that. The company achieves this by looking at the full financial picture, instead of just credit reports.

Veterans United – Best for experienced lenders

In 2018 and 2019, Veterans United provided more VA loans by total volume than any other company on the market. If you look strictly at purchase loans, that streak stretches even further back to 2016. What this means for you is Veterans United  is a company with experience working with VA loans and a company that has approved more people each year than any other company. Current interest rates on VA loans through the company are 3.02% APR for 30-year loans and 3.23% APR for 15-year loans. According to the company’s website, the minimum credit score required by most companies for a VA loan is 660.

Veterans First Mortgage – Best for exploring options

To date, Veterans First Mortgage has helped over 175,000 people, with loans totaling over $21 billion. Thanks to quality service over 30 years in business, the lender has earned an A+ rating with the Better Business Bureau. What’s great about this lender is it advertises that it looks forward to speaking to people who might not be sure of their plans yet. If you find yourself exploring different options, a loan officer from Veterans First Mortgage could be a good first stop. Not only will the lender take the time to talk to you, but it also offers FHA and USDA loans, which might be a better fit.

[Read: Mortgage Refinance Options for People with Bad Credit]

Navy Federal Credit Union – Best for 15-year mortgage

Navy Federal has been a household name for military banking and lending for years. If you’re looking for somewhere that you can handle your traditional banking as well as your mortgage, the company might be a good fit. VA loans from Navy Federal currently have rates as low as 3.195% for 30-year loans and 3.224% for 15-year loans. Additionally, the credit union will allow the seller to contribute 4% of the value of the home towards closing costs to further help with cash out of pocket. You can also get access to the RealtyPlus program through Navy Federal to help link you with a realtor to find the home of your dreams. The current satisfaction level on the program is 98%.

USAA – Best for adjustable rate VA loans

USAA has been around for almost a decade now operating from its San Antonio, Texas, headquarters. The company offers VA loans as well as a ton of other services to service members and their families. Currently, VA loan rates at the bank are 3.971% APR on 30-year VA loans and 4.115% APR on 15-year VA loans. What’s unique about USAA is the bank also offers a 5/1 adjustable-rate mortgage (ARM) loan and two jumbo loan options (30-year and 5/1 ARM). As expected, rates are higher on these two products at 4.125% APR for the 5/1 ARM, 4.88% APR Jumbo 30 Year and 4.13% APR on the Jumbo 5/1 ARM.

What is a VA loan?

The VA loan is a special loan that is only available to active military or former military that meet the required veteran’s status. Additionally, National Guard and Reserve soldiers are eligible after six years of service or 90 days of active-duty service, not including TRADOC time.

The perks of the loan start with the fact that you are able to get into a home without any down payment. With other loans, the minimum required is at least 3.5% — preferably 20% — making this an incredible savings option. Additionally, you’re not required to carry private mortgage insurance with a VA loan. All other lenders must pay this additional premium until they have 20% equity built up in their homes.

How should I choose the right VA loan?

When you’re shopping for lenders, it’s important to look at more than just the rate you’re quoted. While this is one of the most important factors as it affects your payment size and total cost, it’s not the whole picture. You’ll want to look at the repayment terms, the track record of the lender, and any other available resources. Additionally, since you’re looking for a bad credit VA loan, take the time to comb through the eligibility requirements. Many lenders may let you see if you prequalify within minutes and without a hit to your credit score.

Too long, didn’t read?

VA loans are a privilege you’ve earned through your service to your country. Thankfully, bad credit is not a strong enough deterrent to take that away from you. If you use one of the lenders mentioned here, you can get VA loans for bad credit and take advantage of no down payment and no PMI.

Keep reading

We welcome your feedback on this article. Contact us at with comments or questions.

Jason Lee
Jason Lee
Contributing Writer

Jason Lee is a U.S.-based freelance writer with a passion for writing about dating, banking, tech, personal growth, food and personal finance. As a business owner, relationship strategist, and officer in the U.S. military, Jason enjoys sharing his unique knowledge base and skill sets with the rest of the world. Follow Jason on Facebook here

Reviewed by

  • Courtney Mihocik is an editor at The Simple Dollar who specializes in insurance, personal finance, and loans. Previously, she wrote and edited for,, Ballantyne Magazine, Thread Magazine, The Post, ACRN, The New Political, Columbus Alive and the Institute for International Journalism.