The VA does not loan money, they guarantee a portion of the loan to the lender loaning the money. Should a loan go into default, the VA guarantees a portion to the lender so there is less risk to that lender. Less risk equals better rates in most cases which is why VA loans are becoming more popular with lenders . The VA gives a base of guidelines in which the lender uses to qualify and underwrite the loan. However in many cases, Lenders impose overlays which are additional requirements to approve the loan. Since the Lender is the one who is taking the majority of the risk by loaning the money, they must protect themselves and ensure the approval is for a qualified candidate. These overlays can vary between lenders, but many lenders use similar overlays for underwriting approvals.