A Huge VA Loan Guideline Change Could Help More Veterans Qualify for a Home
Sometimes a few words buried deep inside a lending guideline can make a tremendous difference for a Veteran trying to buy a home. That just happened. Effective August 25, 2026, VA revised VA Pamphlet 26-7, Chapter 4, Topic 7 , changing the way certain non-medical collection accounts are calculated when qualifying for a VA home loan. And this is a big win for Veterans. What Changed? When a Veteran has a non-medical collection account without an established payment arrangement, VA requires lenders to account for that collection when calculating debt-to-income ratio and residual income. Previously, the guideline instructed lenders to calculate a monthly payment using: 5% of the outstanding collection balance The revised guideline now calls for: 5% of the outstanding collection balance ÷ 12 months VA's revision became effective August 25, 2026. That little “divided by 12” can make an enormous difference. Consider a Veteran with $12,000 in non-medical collections ...