Answer: -If you have had no late payments on any of your credit obligations within the past one (1) year, then VA will consider your mortgage application regardless of your credit rating. Your best bet is to speak to a loan officer at a bank, let them run your credit report, and they will tell you what they can and cannot do. Don't be surprised if they tell you they will require you to pay off a few of your debts. Some banks do not consider medical debts as applicable and some do. -As the percentage that is financed goes up so does the interest rate. The poorer your credit rating the higher the interest rate. The higher the interest rate the higher the payment. There is no free lunch. -The VA does have a much different scale when it come to home loans.. Try looking on their website there is actually a person that you can call from the VA that can answer that question for you.. With the housing boom changing into now a buyers market the terms may have changed which may work in your favor. Also with VA you never come out of pocket during closing that is one of the perks of being a Vet