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Obtaining a Certificate of Eligibility (COE) is crucial for veterans aiming to purchase, build, or refinance a home with a VA loan.
This document provides a sense of security and stability, reassuring you of your eligibility for the VA loan program.
This document is not just a formality, it’s a testament to your service and a key to unlocking the numerous benefits of the VA loan program.
Securing your COE early in the process can streamline your loan application, ensuring you can move forward with confidence and peace of mind.
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- Available in CA, FL, GA, IL, MD, PA, and TX
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Benefits:
- Lend in all 50 states
- Veteran lending specialist available to you, no matter where you are
- In-house processing and underwriting
- Express Loan Approval program, which allows you to be done with the whole process (minus the contract and appraisal), so you can focus on finding your home.
- Rate Protect (Lock & Shop) lock in your rate before you even find a home!
Who qualifies for VA loans?
To qualify for a VA loan, specific service requirements must be met:
- Active Duty Service Members: You must have served 90 consecutive days of active service during wartime or 181 days during peacetime. Alternatively, active-duty members can request a COE after completing six months of service.
- Reservists and National Guard Members: Must have served actively for at least six years.
- Spouses: Eligibility is available for spouses of service members who died in the line of duty or due to a service-related disability.
Understanding the VA loan certificate of eligibility
A VA Loan Certificate of Eligibility (COE) is an official document from the Department of Veterans Affairs that certifies a veteran or active-duty service member’s eligibility for a VA loan.
This certificate informs lenders about your eligibility, the amount of entitlement available, and any applicable VA funding fee conditions.
This certificate is the first step towards securing a VA loan and making your homeownership dreams a reality.
Understanding entitlement
The entitlement amount available to veterans can vary significantly based on the county where the home is being purchased or built.
Typically, this amount varies between $600,000 and over $900,000.
This entitlement reflects the amount the VA guarantees on your behalf, influencing the terms of your loan.
It’s important to note that the entitlement amount can also affect your ability to secure a larger loan without requiring a down payment.
Additionally, if your entitlement is not fully used on your first home purchase. You can apply the remaining entitlement to purchase another home, provided you meet the necessary eligibility requirements.
VA funding fee
The VA funding fee is an obligatory cost added to the closing costs of a VA loan.
This fee helps the VA continue to support the home-buying efforts of veterans.
However, veterans who receive compensation for service-related disabilities may be exempt from this fee.
Such exemptions also indicate verified income to lenders.
Additional COE conditions
Some COEs might list extra conditions, such as specific requirements based on discharge dates or previous VA loan usage.
A new COE will indicate a higher funding fee requirement if you’ve previously used a VA loan.
How to get your COE
- For veterans: Complete VA Form 26-1880, which requires personal identification, military service information, and details of any prior VA home loans. Mail the form to the appropriate VA Regional Loan Center.
- For spouses: VA Form 26-1817: This form is for unmarried surviving spouses requesting a Determination of Loan Guaranty Eligibility. It also requires identification information, details about the deceased veteran, and prior loan information, if applicable.
- Online request: The VA’s website allows you to request your COE online, which can expedite the process if all necessary information is already on file.
Additional VA loan requirements
After obtaining your COE, prepare for additional VA loan requirements, which include:
- Identification and financial information: Provide pay stubs, current W-2s, and bank statements.
- Credit score and debt-to-income ratio: While the VA does not require a minimum credit score, a higher credit score and a lower debt-to-income ratio can result in better loan terms.
How to apply for a VA loan
To move forward with a VA loan, meet with a qualified lender. A reputable lender, especially one experienced with VA loans, can guide you through the process, ensuring you receive favorable rates and terms.
They can also help with any questions regarding the COE and the VA loan application process.
Frequently asked questions
What is the purpose of a COE for a VA loan?
The COE verifies eligibility for a VA loan, ensuring you can access the program’s benefits.
How long does it take to get a COE for a VA loan?
Processing times vary. Online requests are typically processed quickly, often within minutes, while mail applications can take several weeks.
Can a surviving spouse obtain a COE for a VA loan?
Yes, an unmarried surviving spouse of a service member who died in service or from a service-related disability can obtain a COE.
Do I need a COE for a VA refinance loan?
Yes, a COE is required for both VA purchase and refinance loans.
What if I lose my COE?
You can request a duplicate COE through the VA’s online portal, by mail, or through your lender.
Can I use my COE more than once?
Yes, the VA loan benefit can be reused, provided you meet the eligibility requirements each time.
Ready to secure your VA loan?
Start your journey towards homeownership today by finding the perfect VA lender with My Perfect Mortgage.
Let us help you achieve your dream of owning a home.
Our advice is based on experience in the mortgage industry and we are dedicated to helping you achieve your goal of owning a home. We may receive compensation from partner banks when you view mortgage rates listed on our website.
