Veterans are eligible for a VA loan if they have decent credit and adequate income. They must also prove that the home will be owner-occupied and that they have a Certificate of Eligibility. Without the COE, a VA lender cannot fund your loan.
Find out if you are eligible for a VA loan.
The COE tells the lender that you have VA entitlement. In other words, it’s proof that the VA will guarantee your loan. It also shows the lender how much entitlement you have at the time of loan application. If you’ve never used your entitlement, you’ll have full entitlement, which is $36,000 plus 25% of any remaining amount up to the national conforming limit. Today that means a maximum loan amount of $453,100 and a maximum guaranty of $77.275 total.
You’ll need the following specific documents to prove your eligibility for the VA loan:
Veterans and Former Members of the National Guard Proving Their Eligibility
Veterans must complete VA Form DD-214. The two main areas the VA lender cares about on this document is the character of service and the reason for separation. In a perfect world, you’ll have an honorable discharge and ‘completion of active service’ as your narrative reason for discharge.
If you don’t have either of these items on your DD 214, you still may be eligible for VA loan benefits. The VA looks for discharge types that are anything but ‘dishonorable.’ If you do have a dishonorable discharge, though, you may be able to petition the VA for approval.
Active Duty Members Verifying Eligibility
Active duty members aren’t discharged yet, so the DD 214 form won’t work. In this case, you’ll need a signed statement from your commander or personnel office proving your dates of service. The letter must include your personal identifying information (name, birthdate, social security number) as well as your service start date and the length of time you’ve served, including any time you’ve taken off.
Active National Guard or Reserves Members
Active members of the National Guard or Reserves will need a statement of service from their commander or personnel officer that includes personal identifying information (name, social security number, and date of birth) and the start date of your service. The statement must also include the total amount of service provided and any time lost.
Discharged Members of the National Guard (never active)
Discharged members of the National Guard that were never called to active duty must provide NGB Form 22 and NGB Form 23. NGB Form 22 is the Report of Separation and Record of Service. You’ll have a form for each period of service you performed. NGB Form 23 is the Retirement Points Accounting form and provides the characterization of your service.
Discharged Member of Select Reserve (never active)
Discharged members of the Select Reserve must supply the annual retirement points statement along with a statement of your characterization of service.
If your spouse died while on active duty or as a result of a service-related disability, you may still be eligible for VA benefits. In order to prove your eligibility, you must submit VA Form 26-1817 along with your veteran’s VA Form DD 214.
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If you are a surviving spouse, but are not receiving compensation from the VA, you must submit VA Form 21-534 along with VA Form DD 214, your marriage license, and the death certificate.
Obtaining the COE
You can obtain your COE in one of three ways:
Through the eBenefits portal – You can either log into the system if you’ve already registered, or register when you apply for the COE. You then follow the prompts to request your COE. If the VA has adequate information on hand, you may receive the certificate quickly. If there is an issue, they will let you know the next steps to take.
Via US postal mail – You can mail in VA Form 26-1880, which is the Request for a Certificate of Eligibility. If you are a surviving spouse, you’ll need to send in VA Form 26-1817 along with VA Form DD 214.
Through the lender – VA approved lenders have access to the Web LGY system, which gives lenders almost instant access to your COE. The VA must have adequate information in order to process the request though.
Does the Certificate of Eligibility expire?
No, your COE does not expire. But, if you obtained your COE while you were still on active duty and are now retired, you will need a new COE that reflects your new status.
How long must an active military member serve to get a COE?
Active military members have two service requirements:
Members serving during wartime must serve at least 90 consecutive days
Members serving during peacetime must serve at least 181 consecutive days
How long does it take to get the COE if you apply by mail?
It can take up to six weeks to receive your COE by mail. The VA does recommend that you apply for the certificate online or through your lender for faster service.
If the lender obtains your COE, is it good for any lender?
No. If a lender obtains your COE for you, it is only good for that lender. If you decide to change lenders because you found a better rate somewhere else, that lender will have to secure their own copy of your COE.
Can you have used entitlement restored?
You may be eligible to have your used entitlement restored if you pay off the loan and sell the home. If another veteran assumes your VA loan upon lender approval, you can petition the VA for restoration of your entitlement. You may also ask for a one-time exception if you paid off your VA loan, but kept the property but want to use your entitlement elsewhere.
Is the COE a guarantee of loan approval?
No, the COE only shows lenders that you are eligible for VA financing. You must still prove that you can afford the loan by verifying your income, assets, current liabilities, and your credit score. The lender will then determine if you meet the requirements for a VA loan.
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