How are VA loans processed?
There are two ways a lender may process VA home loans on a prior approval or automatic basis. When the loan is processed on a prior approval basis, the lender takes your application, asks VA to appraise the property, and verifies your income and credit record. This information is sent to VA for review. If VA approves the loan, a commitment by VA to guarantee the loan is sent to the lender. The lender then closes the loan and sends a report of the closing to VA. lf the loan complies with VA requirements, VA issues the lender a certificate of guaranty. In automatic processing, the lender still orders an appraisal from VA, but has the authority to make the credit decision on the loan without VA’s approval. The biggest difference between prior approval and automatic processing is the time saved by avoiding the need to await VA’s approval before loan closing. All lenders do not have the authority to process loans on the automatic basis. Banks, savings and loan associations, and certain othe
