What is a Certificate of Eligibility and How to Get One?

Last Updated on October 7, 2021 by Maggie Sutton

As a thank you for serving our country, the United States military offers numerous benefits to current military personal and retired military veterans. One of these benefits is the VA Loan, which has several advantages over conventional or other types of home loans. But, as part of your eligibility to receive a VA Loan, you’ll need to submit your Certificate of Eligibility, or COE. What is a COE and how do you get yours? We explain the process of obtaining yours and how it plays into the VA Loan.

VA Home Loan

A VA loan, or a Veterans Affairs mortgage, is a great benefit to the brave men and women who are serving or have served in the armed forces. The VA loan is made through private lenders and backed by the Department of Veterans Affairs. This means that you will still apply for a loan through a loan company, but the Department of Veteran Affairs agrees to partially back the loan.

Backing a loan means that if you for some reason can’t or stop paying your mortgage, the Department of Veteran Affairs assumes liability and pays the portion you didn’t and that they are responsible for.

Benefits a VA Home Loan

The benefits are exclusive to active duty and veterans, and they accommodate you with assistance that you will not be able to receive anywhere else.

The program has some great benefits, including:

• No required down payment, though you can put one down if you’d like for any amount
• No minimum requirement for your credit score
• Does not require you to have mortgage insurance if you do not make a down payment
• Interest rates that are typically lower than the standard conventional loan rate
• Refinancing is available up to 100% of what it is worth

Another benefit that isn’t well known is that if you are struggling to make your payments on your mortgage, the VA can work with the lender on your behalf. The VA’s financial counselors can do a few different things to help you out, so you don’t lose your home. They can help you “negotiate” various repayment plans and possibly get a loan modification in place. Because they are on the hook if you don’t pay your mortgage back, they want to help in any way they can to make sure you can make your payments.

Qualifications for a VA Loan

In most circumstances, a VA loan is more straightforward to qualify for than a conventional mortgage. There are fees associated with this loan, though, and they depend on how much you put down, if anything. However, if you are a recipient of disability compensation, then these fees are waived. The fees associated are also usually worth it in the long run, as your interest rate can be lower and that can save you more money over the life of the loan.

The VA loan does have some of the same stipulations of other loans, though. You have to show that you are employed and earning enough income to repay the loan. You also shouldn’t have any excessive or outstanding debt. While the credit score threshold is lower for VA loans, you do still need to provide a credit history and make the minimum credit score.

Obtaining Your Certificate of Eligibility

The first step in getting VA loan approval is obtaining a copy of your Certificate of Eligibility. A COE proves that you meet the military service requirements for a VA loan. 

To be eligible for a VA loan you have to meet specific criteria. Those criteria include:

• Serve for 90 consecutive days of service during wartime or 181 Days of service during peacetime
  • 2 years if enlisted in the Post-Vietnam era
• Enlisted six years in the National Guard or Reserves
• Spouse (not remarried) of a veteran who died from a service-related injury or disability
• Surviving spouse of a POW/MIA service member
• Surviving spouse of a service member killed in the line of duty

By having a COE, you will make the process of applying for a VA loan a lot easier. Lenders are reluctant to lend money to those without one. Loan companies request your COE before they determine your loan eligibility, like interest rate and terms, because they want to make sure that the VA will indeed say you are an eligible servicemember.

Entitlement Codes

The VA entitlement codes are two digit numbers that provide more information to your VA lender about your military service history, and whether or not you are exempt from paying the VA funding fee. That is a mandatory upfront cost that goes directly to the Department of Veteran Affairs. Think of it as paying the government upfront to back your loan over the life of the loan.

Exemption status from this is for veterans or active duty military who receive a monetary supplement for a service-related disability, and eligible surviving spouses.

Is a COE a Guaranteed Approval?

A COE does not guarantee VA loan approval. All it does is show the lender that you meet the eligibility requirements for the VA loan. It asks questions about your current living arrangement and the dates that you served to better assist the lender in helping you. Receipt of the certificate of eligibility still doesn’t mean that you necessarily qualify under the lender’s criteria.

How do I get my Certificate of Eligibility?

You can get your COE three different ways.

1. Login to the eBenefits portal and apply to receive this paperwork yourself
2. Have your lender obtain it for you. VA lenders have access to an exclusive database that holds all of this information
3. You can send in a mailed application to your Regional Loan Center of Jurisdiction

You want to make sure that you have proof of service (DD214 or discharge papers) along with your COE. If you are still active duty, then you will need an original statement of service, and it has to be signed. You can get it signed by a personnel officer or commander of your unit, or by elevated headquarters.

VA Lenders

At Homes for Heroes, our goal is to help all heroes in their journey to homeownership, including military heroes. Our lenders are well-versed in VA home loans and the process, documents, and other necessary items it takes to secure one. When you use a Homes for Heroes loan specialist, you can save hundreds of dollars in fees. Plus, when you use a Homes for Heroes real estate agent, you can get Hero Rewards back as cash once you close on your home. On average, our heroes save $2,400 when buying a home!

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