From Worry to Proof: How Penelope Showed Her Pay-in-Full Charge Account Shouldn't Count Against Her VA Loan
Penelope went from assuming her pay-in-full charge account would count against her VA loan to knowing exactly how to show it shouldn't. The whole change came from one short guideline. Penelope is a fictional buyer near Joint Base Charleston, SC, and her situation is one that comes up often for veterans and service members preparing a VA loan application.
The worry
Penelope has an open 30-day charge account. She uses it, and every month she pays the full balance. Still, as she gathered her loan paperwork, she wondered whether that account would show up as a debt and cut into what she could borrow.
Many buyers assume every account on a credit report becomes a monthly obligation in the loan calculation. That assumption is understandable. For this specific type of account, VA guidance says to look at it differently.
What the VA guideline says
The rule sits in VA guidance at Chapter 4, Topic 5, Subsection h. It starts by defining the account: "An open 30-day charge account is defined as an account in which the borrower(s) must pay off the outstanding balance on the account every month."
Then it tells the reviewer what to check: "For open 30-day charge accounts, determine if the borrower(s) pays the balance in full each month, and has verified funds to cover the account balance in addition to any funds required for closing costs."
And it gives the outcome: "If there are sufficient funds, the payment does not need to be included in Section D of the VA Form 26-6393."
The guideline also covers the other side: "If there are not sufficient funds, a minimum payment of 5 percent of the balance should be considered."
Two checks, not one
Notice that the guideline asks for two things. First, the borrower pays the balance in full each month. Second, the borrower has verified funds to cover the account balance in addition to any funds required for closing costs.
The word "verified" matters. Funds you plan to have are not the same as funds documented on a bank statement. The word "in addition" matters too. The money for the charge account balance is separate from the money you need for closing costs, so both need to be covered.
What Penelope does with it
Penelope does not just hope the account gets treated correctly. She asks for the review by name. She says to her loan officer:
"This is an open 30-day charge account. I pay the balance in full every month. Please review it under VA guideline Chapter 4, Topic 5, Subsection h, and confirm my verified funds cover the balance plus my closing costs."
Then she backs the request with paper. She brings account statements showing full monthly payment, and bank statements showing verified funds. Those two document sets answer the two checks the guideline lays out.
How you can use this today
If you have a pay-in-full charge account and a VA loan ahead of you, start with a simple folder. Put in your recent account statements that show the balance paid in full each month. Add your bank statements that show funds on hand. Then use the same wording Penelope uses so your loan officer knows exactly which part of the guidance to review.
A fair caution
This guideline is about getting an account reviewed under the right rule. It is not a promise about how any individual file will turn out. Every file is reviewed on its own facts, and if funds fall short of the balance plus closing costs, the guideline points to considering a minimum payment instead. That is exactly why the verified funds step is worth checking early.
Penelope is an illustrative character, not a real client. Her story shows how a short passage of guidance can turn a vague worry into a clear checklist.
If you want help sorting through your own accounts before you apply, I am Jason Sharon, and I find the path. Call me at 843-LOW-RATE.
Home Loans Inc - Jason Sharon, Mortgage Broker. Company NMLS #1728740, Jason Sharon NMLS #1281448. Equal Housing Opportunity.
Learn more about this loan program: From Worry to Proof
