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Children and VA Loans: Breaking Down the VA Child Care Letter

Throughout the VA home loan process lenders will want to look at all of your expenses. This includes childcare in which you may be asked to produce a VA Childcare Statement.

Published on January 8, 2021

Let’s face it, taking care of children can be expensive. And those expenses can have a very real impact on your approval for a VA loan.

VA lenders require a written child care statement to show certain expenses. Below we detail those expenses and the ways children can affect your ability to get a VA loan.

What is a Child Care Letter?

A child care letter is required on a VA loan if the borrower has children under the age of 13. A VA loan requires that childcare expenses are counted as liabilities for qualification purposes. The letter states what if any child care costs occurred every month, and if none are incurred the reason.

List of Child Care Expenses

Monthly expenses will affect your debt-to-income ratio. It’s important to remember that only certain types of debts and income count toward your DTI ratio.

  • Daycare Expenses – Daycare expenses can be costly and will affect your DTI. These expenses can sometimes outweigh the cost of your monthly mortgage. Lenders will require that you show your child care written statement showing your monthly daycare expenses.
  • Child Support – If you pay or receive child support monthly, you will have to provide documentation of the amounts.
  • Residual Income – The VA wants to ensure that borrowers have income left over each month after paying all significant expenses, including mortgage payments.

To get a complete picture of how child care expenses affect your eligibility, speak with a home loan specialist today.

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