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The Lowdown on VA Loan Eligibility…

Certificate of Eligibility

VA Loan Eligibility Requirements

To be eligible for a VA loan, you or your spouse must meet the basic service requirements set by the Department of Veterans Affairs (VA), have a valid Certificate of Eligibility (COE) and satisfy the mortgage company’s credit and income requirements.


You may be eligible for a VA loan by meeting one or more of the following requirements:

– You have served 90 consecutive days of active service during wartime, OR

– You have served 181 days of active service during peacetime, OR

– You have 6 years of service in the National Guard or Reserves, OR

– You are the spouse of a service member who has died in the line of duty or as a result of a service-related disability.


VA Loan Certificate of Eligibility (COE)

While you DO NOT need your Certificate of Eligibility (COE) in hand to apply for a VA loan, it is an important part of VA loan eligibility. Your COE provides the mortgage company with confirmation that you qualify for VA loan benefits.

Again, it is not necessary to obtain your COE before applying for a VA loan as most mortgage companies that do VA loans are able to get your COE through the VA’s automated system. In fact, nearly all VA loan COEs are requested electronically, and about two-thirds of certificates are issued immediately, according to the VA.

There are three basic ways you can obtain your COE for a VA loan, which include:

1. Applying through a VA approved mortgage company

2. Applying online through the VA’s eBenefits portal

3. Applying by mail with VA Form 26-1880


Documents Required to Obtain a COE

Proof of service to obtain your COE often comes in the form of the DD Form 214 for regular military, and the NGB Form 22 and NGB Form 23 for National Guard and Reserves. However, this isn’t always the case. See the required forms for each service type below.

Additional VA Loan Eligibility Requirements

Although the VA determines the guidelines for VA loan eligibility, private mortgage companies who finance the home typically have an additional set of guidelines potential borrowers must satisfy, including sufficient reliable income to repay the loan, acceptable levels of debt, and a credit score that meets the mortgage company’s credit requirements.

The property will also need to satisfy the VA’s appraisal process, which looks at the home’s fair market value along with its condition.


VA Loan Credit and Income Requirements

The VA does not set a minimum credit score requirement for VA loan eligibility, but mortgage companies typically do. Because of this, VA loan credit score requirements vary by mortgage company, with most mortgage companies typically requiring a minimum 620 mortgage credit score.

In addition to credit score, the VA requires borrowers to maintain a certain amount of income left over each month after all major expenses are paid. The excess is meant to cover typical family needs, such as food, transportation and medical care, and is known as residual income.

By enforcing residual income requirements, the VA increases the chances of its borrowers earning sufficient income to meet all financial obligations, and also ensures borrowers have a cushion in the event of an emergency.


How to Apply for a VA Loan

Veterans and service members don’t need to know if they’re eligible for a VA loan to try and start the process. You’ll get a good handle on your ability to land a VA loan during the first step – loan pre-approval.

With most mortgage companies, the VA loan process typically takes 30 to 45 days once you’re under contract on a home, although every buyer’s situation is different. We typically close VA loans in 30 days or less after we receive the purchase contract. Applying for a VA loan doesn’t obligate you in any way to a particular mortgage company or to moving forward with the home buying process.

Why a VA Loan?

There are many benefits, as taken directly from the Veterans Affairs site: no down payment required (unless required by the mortgage company or the purchase price is more than the reasonable value of the property);buyer informed of reasonable value; negotiable interest rate… and more.

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