VA Loan Certificate of Eligibility – Why You Need it and How to Get One

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VA Loan Certificates of Eligibility have made it possible for thousands of veterans to take advantage of VA Loans to make their dreams of owning a home a reality. Buying a home can be an expensive and complicated process. So, anything that makes the home buying process easier and more accessible is welcome. Fortunately, VA Loans do just that, as they give military members and veterans an easier and more affordable method for buying a home.

One of the first steps in the VA Loan process is obtaining a VA Loan COE (Certificate of Eligibility). The COE is used to verify that you are, in fact, eligible to use the VA Loan home guarantee benefit.

With your COE in hand, you will be well on your way to owning a new home. All you need to do to get there is a little bit of research. Find a reliable lender who can help you work through the process of applying for your VA Loan certificate. Read on to learn about VA Loans, what they entail, and what criteria you need to meet to qualify for one.

Benefits of a VA Loan

First and foremost, VA mortgages offer several benefits compared to other conventional home loans. They offer homebuyers the ability to purchase a home with $0 down. This allows homebuyers to apply for a home loan without having to worry about having a large downpayment saved up.

VA Loans also often have lower interest rates than a similar conventional home loan. This makes them an attractive option for both veterans and their spouses.

The main reason that these loan terms are so accommodating is that the Department of Veteran Affairs partially backs the loan that you take (they don’t actually fund the loan, however, they do guarantee a portion of the loan). This arrangement makes these loans very attractive to lenders. This is also why VA loans are often both easier to qualify for and have lower interest rates than a comparable conventional home loan.

While there isn’t a fixed limit on how much you are allowed to borrow, be aware that there is a limit to how much the Department of Veteran Affairs will back without the homebuyer making a down payment. This article provides more information on VA Loan limits.

Furthermore, there are a few requirements that you have to meet to qualify for a VA Loan (being eligible for a loan and qualifying financially for the loan are two different things). The requirements include having a consistent source of income that can cover the cost of your monthly mortgage payment and other home-related expenses, and meeting lender requirements for credit score, debt to income ratio, and other factors.

Most VA Loan holders are first-time homebuyers of single-family residences. However, they can also be used toward a few other means of homeownership, such as building a new home, adding energy-efficient improvements to your current home, and even refinancing your existing VA-guaranteed loan. No matter what homeownership situation you find yourself in, you stand to gain a lot from a VA Loan. Learn more about the types of homes you can buy with a VA Loan.

Who Is Eligible for a VA Loan?

To be eligible for a VA Loan, you have to meet specific requirements. However, these requirements are not strictly limited to financial factors such as your income and credit score. They also take into account the length of your military service, which part of the military you served in (Active Duty or Reserve Component), whether it was wartime or peacetime service, and the nature of your military discharge.

Military Service Requirements

Most members of the regular military, veterans, reservists, and National Guard can apply for VA Loans. However, there are specific service requirements that you need to meet to be eligible for one.

For example, those with active duty service need to have served either 90 consecutive days during wartime or 181 consecutive days during peacetime.

As for National Guard and Reserves members, you need to have been an active member for a minimum of 6 years to qualify (unless you were activated for the above time periods and qualify for a VA Loan through your active duty service).

Additionally, you may likely qualify for a VA Loan if you were discharged due to a service-related disability. Not only are veterans eligible to apply for VA Loans, but their spouses can also apply if the veteran in question died during active duty or sustained a disability that resulted directly from their military service.

Keep in mind that having a VA Loan Certificate of Eligibility won’t automatically entitle you to the loan itself. You will still have to go through a mortgage lender to buy a home and must meet the lender’s qualifications.

This article provides more thorough coverage of VA Loan eligibility requirements.

Financial Requirements of Getting a VA Loan

The VA doesn’t actually fund VA Loans. They guarantee a portion of the loan. The loans are made through banks, credit unions, and other authorized VA Loan lenders.

Because of this, the lenders actually determine the financial requirements of being eligible for a Veterans Affairs Loan. While there is no specific minimum credit score required by the VA, most lenders require a credit score of 620 or better.

Lenders will review your credit history and score and ensure you have adequate income to pay for your mortgage. They will also look at a variety of information, including your debt to income ratio, net worth, and other factors as part of the home mortgage underwriting process.

These parameters are there to ensure that you can cover the impending costs of the home that you would acquire with the loan. If you eventually struggle to make your mortgage payment, the VA also offers services to mediate with your lender on your behalf.

How to Get VA Loan Certificate of Eligibility

You don’t need a Certificate of Eligibility to start your home loan process. But it is advisable to get it taken care of early in the home loan process so that you don’t have any delays that prevent you from closing on time.

Before applying for a certificate of eligibility, be sure that one of the following applies to you.

  • You are a veteran that meets the military service requirements, OR
  • You are a veteran who fits the criteria of having been discharged due to a service-related disability, OR
  • You are the un-remarried spouse of a veteran who died during active duty or from a service-related disability.

There are a few different options when it comes to getting your VA certificate of eligibility:

Getting Your COE from a Lender

Thanks to the fact that we live in the age of technology and automation, many lenders can quickly get your COE via the VA’s database. One excellent benefit of this method is that in most cases, you will be able to get your COE in a matter of minutes. All you need to do is provide proof of your military service, and your eligibility can be confirmed via an online database.

This is the process I have used for my last two VA Loans. The lenders were able to get this taken care of incredibly quickly. However, I also used lenders that specialize in VA Loans. You may wish to use another method if your lender doesn’t process many VA Loans.

Getting Your COE Online

If you prefer to handle this aspect of the loan process on your own, you can also use the VA’s eBenefits portal to get your COE online. It is also quite easy to do. All you need is to log into your account and find the COE application page. It is as simple as that, and you should be able to download a copy of your COE almost right away.

Getting Your COE Via Mail

Mailing in your application is also an option for getting your COE. With this option, you fill out the relevant form (found here) and send it in along with your proof of eligibility. The only downside to this method is that it is the slowest option of the three. It can take several days since it depends on how quickly your paperwork gets delivered, processed, and returned. In most cases, it will take at least a week, and sometimes longer. Don’t use this method if you are in a time crunch.

Summing It Up

For many veterans and spouses of veterans, the VA Certificate of Eligibility is the first step toward a more stable and comfortable future. Once you have figured out whether or not you meet the eligibility requirements, you will be able to get all of the necessary paperwork to apply for your COE officially. Once you have it, you will be one step closer to owning a new home or enhancing your current one.



Ryan Guina served over 6 years on active duty in the USAF and is currently serving in the IL Air National Guard. He has been writing about military and financial topics since 2007. He also writes about money management and investing at Cash Money Life and military benefits and related topics at The Military Wallet. Ryan uses Personal Capital to track and manage his track his finances. Personal Capital is a free software program that allows him to track his net worth, balance his investment portfolio, track his income and expenses, and much more. You can open a free account here.

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