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I was approved for a 100k VA loan mortgage. I received my pre-approval email from USAA telling me the amount I was approved for and it also said the date to which the amount was good till. After calling USAA telling them that I found a home and want to move forward with the purchase, they tell me that I am no longer approved because my credit score is 630 and the minimum is 620. I have read that when applying for a VA Loan, your credit score is not a deciding factor by the last 12 months of consecutive payments are. I have made all my payments on time for the past 48 months. USAA told me that there was a policy that took effect shortly after I was approved and that I was not grandfathered into that category. The new policy now looks at the credit score of the borrower. Can USAA do this to me? Should I apply for a VA loan at another bank?

I was approved December 17, 2011
Below is the confirmation email that USAA sent to me.

Thank you for choosing USAA Federal Savings Bank for your mortgage financing needs.

Congratulations! You’ve been pre–approved for a mortgage loan from USAA Federal Savings Bank. Your mortgage loan pre–approval for a $ 100000.00 loan amount in XXX County, TX will be available until March 14, 2012.

4 Thoughts on Can USAA approve my VA loan and then decline it a month later?
  1. Reply
    June 5, 2012 at 1:36 pm

    I do not know exactly all the stuff that changed with mortgages on 01/01/12, but stuff DID change and people are not all getting what they thought they could in December.

    USAA is a legitimate company – from a Realtor’s perspective, they’re not easy to get ah old of, but they do end up giving you good $ numbers when all is said and done.

  2. Reply
    June 5, 2012 at 2:18 pm

    You are mistaking a pre-approval for an actual approval. Pre-approvals are not worth the paper upon which they are printed. Yes, USAA can decline your ‘approval’ at any time up to the actual closing of the loan. Happens all the time.

  3. Reply
    Lisa L
    June 5, 2012 at 2:42 pm

    USAA is not the best. They talk a good game but have lots of issues. I know this because I get lots of clients who get tired of dealing with them. How can the fact that your score is 630 & the minimum is 620 be a reason to deny you? That is 10 points higher than the minimum per them. Credit score is always a factor with all mortgages, VA included so not sure where they are coming from with that statement. The policy that took effect must have been their policy, not VA’s. Go elsewhere. Tell them what your score is before you let them pull credit. Some companies have a 640 minimum on VA loans.

    Not sure what your credit issues are if you have made timely payments for 48 months & still have that low score. Your balances may be too close to the limit on your credit cards. Try to get your scores up in any event.

  4. Reply
    June 5, 2012 at 3:18 pm

    I can find nothing that have changed in the last past month or two, nor have I gotten any information from lenders that do VA mortgage loans. As far as I know there are no changes. A credit score is not used as a determining factor for a VA mortgage loan or approval.

    Perhaps there were additional reasons for them denying your pre-approval. Also pre-approvals do not have the same meaning throughout the country. In some parts of the country a pre-approval is simply a high grade pre-qualification.

    I am not a fan of USAA, however, they are a reputable firm that is in business according to their business plan is to assist active duty military and retired military financial planning.

    You might try a local mortgage lender that is authorized to do VA mortgage lending.

    I hope this has been of some benefit to you, good luck.

    “FIGHT ON”

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