As a veteran, you have earned valuable benefits to help you achieve home ownership. The Department of Veterans Affairs offers a home loan guaranty program that can help you obtain a mortgage with favorable terms. To take advantage of this program, you must first obtain a Certificate of Eligibility.This document verifies your service and entitlement for a VA home loan.
Obtaining your COE is an straightforward process if you meet the basic eligibility criteria. You must have served a minimum number of days on active duty, not have a dishonorable discharge, and meet certain income requirements. Once you have confirmed your eligibility, you simply need to apply for your COE through the VA’s website, by mail, or with the help of a VA-approved lender.
With your Certificate of Eligibility in hand, you open the door to a world of home ownership opportunities with a VA home loan. You can shop with confidence knowing you have already cleared the first hurdle to accessing your hard-earned benefits. A little time and effort now can make a big difference in achieving your goal of home ownership. Follow the necessary steps and you’ll be well on your way to turning the key to your own front door.
Learn how to apply for a Certificate of Eligibility (COE) for a VA home loan. This is the first step to getting a VA guaranteed home loan or Native American Direct Loan. It confirms to your lender that you qualify for VA home loan subsidies. Next, choose your loan type and learn the rest of the loan application process.
What Is a VA Certificate of Eligibility?
A VA Certificate of Eligibility (COE) is an official document issued by the U.S. Department of Veterans Affairs (VA) that verifies your entitlement to VA home loan benefits. The COE specifies the amount of your home loan entitlement and confirms that you meet the basic service requirements to qualify for a VA-backed home loan.
To obtain a COE, you must first meet certain eligibility criteria, including:
- Active-duty service members: Must have served at least 90 continuous days of active duty. National Guard members must have completed at least 90 days of active duty service under Title 32.
- Veterans: Must have been discharged under conditions other than dishonorable. Generally, you must have served at least 2 years of continuous active duty.
- Reservists: Must have completed at least 6 years of service in the Selected Reserve or National Guard. Members of the Individual Ready Reserve are not eligible.
Once you confirm your eligibility, you can apply for a COE through the VA’s website, by mail using VA Form 26-1880, or with the assistance of a VA-approved lender. The COE verifies your remaining entitlement amount, which is the maximum dollar amount the VA will guarantee for your home loan. Lenders typically require a valid COE before approving a VA-backed mortgage.
The COE allows eligible service members, veterans, and reservists to obtain home financing through private lenders with the guarantee of partial protection against loss in the event of default. This valuable benefit has helped millions of veterans achieve the dream of homeownership.
Qualifying for a VA Home Loan Certificate of Eligibility
To qualify for a VA home loan, you must meet certain requirements as set by the Veterans Administration.
You must have served in the U.S. armed forces and received an honorable discharge. Both veterans and eligible surviving spouses may qualify. Those currently serving must have a minimum of 90 days of active duty service during wartime or 181 days during peacetime.
Certificate of Eligibility
You need to obtain a Certificate of Eligibility (COE) which verifies to lenders that you meet the VA’s requirements. You can apply for a COE on the VA website, by mail, or with the help of a VA-approved lender. Provide details like your military service number, dates of service, type of discharge, etc. The VA will review your records to determine your eligibility and remaining entitlement.
Entitlement and Down Payment
The VA will specify your maximum entitlement amount which determines the mortgage amount you can get. You typically do not need a down payment for a VA home loan. However, a down payment of at least 5% is suggested to get better terms. The VA home loan can cover up to 100% of the purchase price.
Credit Score and Debt-to-Income Ratio
While the VA does not have a minimum credit score requirement, most lenders prefer scores of at least 620. Your debt-to-income ratio should be less than 41% of your monthly income. Lower scores or higher ratios may result in higher interest rates.
How to Apply for a COE for VA Loans
To apply for a Certificate of Eligibility (COE) for VA home loan, you will need to submit an application to the VA. The COE confirms to lenders that you are eligible for a VA-backed home loan.
To initiate the process, you will need to gather some essential documentation, including:
- Your discharge or separation papers (DD214 form) to verify your service dates and type of discharge
- Evidence of service for recently discharged Veterans (if discharge papers are not yet available)
- Marriage certificate (if applicable)
- Divorce decree (if applicable)
Once you have the necessary paperwork compiled, you can apply for your COE in one of two ways:
- Apply online using eBenefits, the VA’s self-service website. You will need to create an eBenefits account, then select “Apply for Certificate of Eligibility for VA Home Loan” to start your application. Upload your documentation, review and submit the application. The VA will process your application and mail you your COE.
- Apply by mail using VA Form 26-1880, Request for Certificate of Eligibility for VA Home Loan Benefits. You can download the form from va.gov and mail it along with copies of your supporting documentation to the VA regional loan center that serves your area. The VA will review your application and mail you the COE.
Either application method typically takes between 2 to 3 weeks to process. Once you receive your COE, it is valid for 6 months. You will need to provide the COE to a lender when applying for a VA home loan to confirm your eligibility for the VA home loan benefit. The lender will then work with you on next steps to obtain preapproval for your mortgage.
Now that you understand the requirements and process for obtaining a VA home loan Certificate of Eligibility, you’re ready to start your application. Don’t delay – interest rates are still at historic lows, and home prices in many areas remain affordable. A VA-backed mortgage could be your ticket to homeownership with little or no down payment. The benefits are significant, but the window of opportunity may not last forever. Take the next step and start your application today. In a few short months, you could have the keys to your new home in hand and be well on your way to building wealth through the equity in your property. The future you’ve been dreaming of starts now – go get your Certificate of Eligibility and open the door to your new life as a homeowner.