If you’ve been wondering how to get a VA Certificate of Eligibility in order to apply for a loan through the VA Home Loan Program, there’s no need to look any further.
A VA Loan Certificate of Eligibility, which shows lenders that you may qualify for a VA home loan, is fairly easy to request.
It’s important to remember, though, that a home loan is not guaranteed even with a certificate. Potential homeowners must still meet additional requirements in order to obtain a home loan.
Nevertheless, it is the first all-important step to obtaining a VA home loan and financing your dreams.
With that in mind, here are the steps you’ll need to take to get your COE and demonstrate your eligibility for a VA loan.
What Is a VA Certificate of Eligibility?
As its name suggests, the COE is a document which deems you eligible for a home loan from the VA. You can also think of it as step one in your VA loan application process.
The COE conveys to private lenders that you have served your due time in the US military (we’ll discuss the minimum requirements below) needed to obtain a VA loan.
VA loans are an excellent alternative to traditional home loans that veterans have access to.
With the ease of applying for a VA loan, there is no reason you shouldn’t go for it.
Why You Need a VA Certificate of Eligibility
Over 60 years ago, the VA Loan Guaranty Program began offering affordable loans to veterans as a way of thanking them for their service and giving them an opportunity to purchase homes that some might find difficult to fund otherwise.
VA Loans are unbeatable, offering veterans a guarantee that the government will pay close to a quarter of their mortgage in case of default.
While they’re distributed by private lenders, these loans are backed by the VA, adding a layer of certainty to their commitment.
Even more beneficial, VA loans come with no required downpayment, letting vets and active duty miltary personnel purchase, build, or refinance a home no matter the state of their savings account.
These loans also come without the requirement of monthly PMIs, saving you money on premiums.
In order to qualify for a low-interest VA loan with no down payment, you must have a VA Certificate of Eligibility, which is available to those people who serve or have served in one of the branches of the armed forces.
In order to obtain a certificate, you must meet certain eligibility requirements as listed on the Department of Veterans Affairs website.
Without the certificate, there is no way to obtain a loan through the VA Home Loan Program.
How to Request a VA Certificate of Eligibility
Before you request a certificate, you’ll need to submit a copy of your discharge papers, showing how you were discharged.
Those who are dishonorably discharged are not eligible for a certificate.
If you do not have your discharge paperwork handy, you will need to request a copy of your form DD214, which proves military service.
In addition to that requirement, there are basic service requirements for applicants to qualify.
Before you proceed with the application, you need to calculate the amount of time that you served.
Basic Eligibility Requirements for a VA Certificate of Eligibility
Did you serve for a total of 90 days in a row during a time of war during World War II, the Korean conflict, the Vietnam era, or the Persian Gulf War? If so, then you are eligible.
In addition, if you served for a total of 181 consecutive days during a time of peace following times of war, then you are also eligible.
If you have served more than six years in the National Guard or Reserves, you are eligible as well.
Last, if you are currently on active duty or are a surviving spouse of a veteran who died in service or as a result of their service, you may also qualify for VA loan eligibility.
How to Apply for a VA Certificate of Eligibility
You can apply for a VA Certificate of Eligibility in three different ways.
- You can apply online at the Veteran’s Information Portal, which lists all of the acceptable documents to upload as proof of your service.
- You may also apply through a VA approved lender, which could be ideal if you wish to complete the full VA loan application in one place.
- Your other option is to apply by mail. With that option, you simply print and mail in VA Form 26-1880 from the Veteran’s Information Portal. If you are unable to print a copy Form 26-1880, you can call 1-888-244-6711 to request a copy.
Information Needed to Apply for a VA Loan Certificate of Eligibility
You’ll need to provide basic information about yourself, like your contact information, what branch of the service you served with, your status, rank, birth date, and whether or not you are married when you’re finally ready to request a copy of Form 26-1880.
Beyond proving your eligibility, this information could help you get the best loan rates available.
In addition to listing out all of your personal information, the Certificate of Eligibility you receive will include an entitlement code, which may leave you scratching your head if you aren’t familiar with it.
This code, which may range from 01 to 11, will dictate the time period in which you served, or the status of your previous VA loans if applicable.
If you get an 05 on that scale, signifying an entitlement restored, you may pay higher fees in the future than first-time borrowers.
Additional Considerations for Your VA Loan Application
As highlighted throughout this post, your COE application has basic requirements such as honorable discharge and a minimum period of service in the military.
VA Approval Requirements
Once step one is completed, you will be required to apply separately for your VA Loan, presenting your COE as evidence.
In addition to obtaining a Certificate of Eligibility, VA loan approval does come with a few stipulations.
While there is not a set minimum income requirement, the loan does require applicants to demonstrate a steady and stable income that suggests their ability to repay the loan in their current financial state while balancing their other expenses.
Alongside that requirement, the VA does have a residual income requirement. This assessment tool looks at the amount of leftover, or residual, money an applicant has at the end of the month.
These minimums differ from region to region and depend on family size, but they are reasonable for the average person.
Private Lender Requirements
While the VA may approve your application based only on the requirements above, the private lender providing your loan may have a few more expectations.
Requirements differ across the board, but you can expect that some VA lenders will look at your credit score to determine your likelihood of paying your mortgage.
That score could impact the types of rates you receive. Additionally, your lenders may look at your debt to income ratio to get a clearer picture of your finances.
Best VA Loan Companies
With a plethora of lenders to choose from, we’ve compiled our top picks for the best VA loan companies, highlighting their best features, the types of rates and loan amounts they offer, and how they can benefit you.
We’ve also provided you with a rate tool that can give you quick estimates of the loan rates you can expect with the company.
Each of the providers on the list has demonstrated a commitment to giving back to the military and seeing veterans succeed in their lives. The top three are dedicated solely to military servicemen and women.
Once you have your COE in hand, you can start shopping for rates from these providers.
If, at any time, you need help with completing any of the forms or have a question about eligibility requirements needed to apply for a VA Loan Certificate of Eligibility, you can contact the Department of Veteran Benefits for help.
You can also contact an authorized VA Loan lender who can help you navigate through the process and potentially pre-qualify you for a VA Loan.
Equal Housing Opportunity. The Department of Veterans Affairs affirmatively administers the VA Home Loan Program by assuring that all Veterans are given an equal opportunity to buy homes with VA assistance. Federal law requires all VA Home Loan Program participants – builders, brokers and lenders offering housing for sale with VA financing – must comply with Fair Housing Laws and may not discriminate based on the race, color, religion, sex, handicap, familial status, or national origin of the Veteran.