How often are VA loans denied?
We analyzed every VA loan application reported under HMDA for 2025: more than 1.1 million applications from lenders across the country. Here's how VA purchase loans compare with other loan types:
| Loan type (purchase) | Decided | Denied | Denial rate |
|---|---|---|---|
| VA | 368,416 | 30,222 | 8.2% |
| FHA | 752,027 | 96,026 | 12.8% |
| Conventional | 2,491,089 | 380,647 | 15.3% |
Source: 2025 HMDA data, CFPB/FFIEC. First-lien loans on a primary residence. Denial rate = denied ÷ (originated + approved but not accepted + denied).
The VA purchase denial rate held steady from 2024 (8.3%) to 2025 (8.2%).
Refinances are a different story
If you've seen a higher number quoted for VA loans, it probably included refinances. VA cash-out refinances have a much higher denial rate:
| VA loan purpose (2025) | Denial rate |
|---|---|
| Home purchase | 8.2% |
| Rate/term refinance (including IRRRL) | 13.5% |
| Cash-out refinance | 39.2% |
Across all VA loan types combined, 16.2% of applications were denied. For buying a home, the number that matters is 8.2%.
What does "denied in underwriting" mean?
Underwriting is the step where the lender's underwriter checks your file against VA and lender guidelines: income, credit, assets, the appraisal and the documents behind each one. A denial "in underwriting" means the file didn't meet those guidelines once everything was verified.
HMDA data doesn't record when in the process a denial happened. The rates above cover all application denials. Many happen early, when a loan officer reviews the application. Others come later, after an underwriter has reviewed the full file.
The underwriter doesn't contact you directly. Requests for documents or explanations come through your loan officer or processor, so how quickly and completely you respond to them matters.
The top reasons VA purchase loans are denied
When a lender denies an application, it reports up to four reasons. Here's how often each one appeared in 2025 VA purchase denials:
| Denial reason | Share of denials |
|---|---|
| Debt-to-income ratio | 33% |
| Credit history | 27% |
| Incomplete application | 15% |
| Other | 15% |
| Collateral (appraisal or property) | 11.5% |
| Insufficient cash | 8% |
| Unverifiable information | 8% |
| Employment history | 5% |
Shares total more than 100% because a denial can list several reasons.
Debt-to-income ratio. Your monthly debts compared with your gross monthly income (DTI). Denials often follow new debt taken on mid-process (a car, furniture, a new credit card) or income that ends up counting for less than expected.
Credit history. Late payments, collections or new negative items. The VA doesn't set a minimum credit score; each lender sets its own. Lenders also re-check credit before closing, so a new account or a jump in balances can change the approval.
Incomplete application and unverifiable information. Together these appear in about 1 in 4 denials. Usually a document the lender needed never arrived, or something on the application didn't match what the lender could verify.
Collateral. Issues with the appraisal or the property itself. These appeared in only about 1 in 9 denials, so a low VA appraisal is far less likely to sink a loan than most buyers fear. See the myth →
Insufficient cash. Not enough verified funds for closing costs or reserves. On a VA loan you usually don't need a down payment, but you may still need cash for some closing costs unless the seller or lender covers them.
A high debt-to-income ratio rarely gets a VA loan denied
Many buyers believe a debt-to-income (DTI) ratio over 41% means an automatic no. The data says otherwise:
| DTI (2025 VA purchase) | Share of applications | Denial rate |
|---|---|---|
| Under 36% | about 22% | 6.3% |
| 36% to 49% | about 45% | 5–7% |
| 50% to 60% | about 25% | 7.3% |
| Over 60% | about 6% | 35.3% |
About a quarter of VA purchase applicants had a DTI between 50% and 60%, and only about 1 in 14 of them was denied. The reason is residual income: the money left each month after major expenses. When residual income is strong, VA guidelines let a borrower qualify above 41% DTI. Once DTI goes above 60%, the denial rate jumps to about 1 in 3.
How to avoid a VA loan denial
- 1
Get a real pre-approval, not a quick estimate. Ask your lender to review your income documents and credit before you make an offer.
- 2
Don't open new credit or make large purchases until after closing. That means no car loan, no furniture financing and no new cards. Lenders re-check credit before closing.
- 3
Know which of your income counts and how it's documented. That includes civilian wages, self-employment, VA disability, military retirement, Guard/Reserve drill pay and BAH. Each type has its own documentation rules.
- 4
Gather documents up front. You need bank statements only for the accounts your earnest money or closing funds come from. Signed tax returns are needed only if you're self-employed, a 1099 contractor or have rental income.
- 5
Answer your loan officer's requests quickly and completely. Incomplete files are one of the top reasons for denial.
- 6
Keep your job and income steady. If anything changes during the process, tell your loan officer before you do it, not after.
- 7
Choose a lender that does VA loans regularly. Credit score minimums and other overlays vary by lender.
What to do if your VA loan was denied
A denial from one lender isn't a final verdict on your VA benefit.
- Get the reason in writing. Under federal law, a lender that denies your application must tell you why, or tell you how to ask for the reason.
- Find out if it can be fixed. If the issue was a missing document or an explanation, it may be solved quickly. If it was DTI or credit, ask what would need to change.
- Remember that lender rules vary. Credit score minimums and some other requirements are set by the lender, not the VA. Another lender may approve the same file.
- Fix it and reapply. Paying down a balance, correcting a credit report error or documenting additional income can change the outcome.
Denied and not sure why? Book a free call and get a second set of eyes on what happened and what to do next.
Book a call →Frequently asked questions
How often are VA loans denied in underwriting? +
About 8.2% of VA home purchase applications were denied in 2025, according to HMDA data. HMDA doesn't separate denials at underwriting from earlier denials, so this is the overall rate for VA purchase applications.
Are VA loans harder to get than conventional loans? +
No. In 2025, VA purchase applications were denied at a lower rate (8.2%) than conventional (15.3%) or FHA (12.8%) purchase applications.
What's the most common reason a VA loan is denied? +
Debt-to-income ratio, which appears in about a third of VA purchase denials. Next come credit history (27%) and incomplete applications (15%).
Can a VA loan be denied after pre-approval or right before closing? +
Yes. Lenders re-verify credit, income and employment before closing. New debt, a job change or a missing document can change an approval late in the process. That's why it's important to keep your finances steady until you close.
What DTI is too high for a VA loan? +
There's no hard VA cap. Applicants with a DTI of 50–60% were denied only 7.3% of the time in 2025, because VA uses residual income alongside DTI. Above 60%, denials rose to about 1 in 3.
Can I reapply after a VA loan denial? +
Yes. There's no VA waiting period after a denial. Fix the issue that caused it, or apply with a lender whose requirements fit your situation.
About this data
These figures come from the 2025 Home Mortgage Disclosure Act (HMDA) data published by the CFPB and FFIEC. That data covers most U.S. mortgage applications. We counted first-lien home purchase applications for a primary residence that received a decision: originated, approved but not accepted, or denied. Withdrawn applications and files closed as incomplete aren't included. HMDA doesn't include credit scores and doesn't record the stage at which a denial happened. These are national figures, not any single lender's approval rate.
Source: CFPB/FFIEC HMDA Data Browser