Last Updated on February 7, 2023 by Bob Filipczak
The VA Certificate of Eligibility is the one of the first things you will encounter when you start investigating the VA loan process. The good news is, while you do need this important document to complete your application, it is not difficult. It’s just a one page form, it’s online, and you don’t need to get that done before you do anything else.
Getting a VA Loan is a process, and it has many steps. The VA Loan Certificate of Eligibility is one of the steps that will need to be completed, but you can begin the process of applying for a VA Loan without it. It just needs to be done before the closing.
If you are wondering why you might want to use a VA Loan, the list of benefits are quite convincing. In terms of saving you money and landing the house you want, the VA mortgage is one of the most popular benefits you can get if you are an active duty service member or a military veteran. The big three in terms of benefits are:
- No down payment
- Low interest rates
- No private mortgage insurance (PMI)
That’s good stuff, right? So, here’s what you need to know about the VA Certificate of Eligibility.
VA COE: What is it?
The Certificate of Eligibility is exactly what it sounds like: it verifies to the VA Loan processors that you are, in fact, eligible for the program. It also has two pieces of important information embedded in it:
- Your loan entitlement code
- Your VA funding fee
The loan’s VA entitlement is the more complicated of the two. It tells you how much the VA Loan will cover, meaning how much the The Department of Veterans Affairs will guarantee your loan. It’s important to remember that the loan for your house will come from a private financial institution while the VA home loan benefit guarantees that loan to minimize the risk.
The VA will guarantee 25% of the loan amount, and the basic entitlement is $36,000. With a little math, you can see that the guarantee will cover a $144,000 mortgage loan. If that seems low, it is. Most single family homes in the U.S. cost quite a bit more than that (at the time of writing this article the median price for a home in the United States is about $374,000).
The VA knew it needed to change the basic entitlement to keep up with the market. It made some adjustments to its policies and regulations and came up with a secondary entitlement that covered home loans up to $647,000. If the entitlement looks a little funky on your COE, it’s because they are working with two entitlements – basic and secondary.
Regarding the VA funding fee, that’s a fee many active duty military personnel and veterans need to pay at closing. It’s a one time fee, and the COE will tell you how much your payment will be. If you have a service-related disability or a purple heart, this fee will often be waived.
When it comes to loan limits on VA Loans, it’s important to remember there is no upper limit on the VA loan as long as the mortgage lender is willing to give you the loan.
Where Can You Find the VA Certificate of Eligibility Form?
The VA Home Loan Certificate of Eligibility form is online. On page 3 of the form, there is a list of addresses if you want to send them a Request for a Certificate of Eligibility (VA Form 26-1880). You can also mail your completed VA eligibility form to the appropriate office on that list.
COE VA Loan Shortcut
If you’ve already got a private lender* ready to work with you on your VA Loan, they can request a Certificate of Eligibility directly from the Department of Defense. There’s an online system called Web LGY that has this information online and it can be immediately downloaded. You can also do it yourself by using the VA’s eBenefits portal.
*One of the benefits of working with Homes for Heroes is we connect you with our local mortgage loan officer, who is committed to helping military members with their mortgage needs. In addition, our local real estate specialist can help you find a new home. Together this team of local specialists can save you an average of $3,000 after closing on a home with them.
VA Loan and VA Certificate of Eligibility
So how does the VA decide who is qualified for a VA Loan and, therefore, the Certificate of Eligibility? Ok this is where it could get complicated. If we could just say that anyone who is a veteran and served at least 90 days (continuously) in the U.S. military meets the eligibility requirements, that would be a start. But after that, the minimum service requirements come hard and fast.
Active-duty service members are the easiest group. They are eligible for the VA loans, even though the name of the loans themselves suggest that they are for veterans. If you are an active duty service member and you’ve served at least 90 consecutive days, you are good to go.
Military Veterans are generally eligible for VA loans, but it depends on other factors. There is a chart that describes all the variables in detail, and it’s pretty easy to follow. You will need to know some personal information including:
- When did you serve?
- How long did you serve (continuously)?
- Were you an officer?
- Do you have a service-connected disability?
Even though the chart looks complex, the criteria is pretty straightforward. Most veterans could tell you the answers to these questions in their sleep.
National Guard Service Members
Veterans who were National Guard members between 1990 and now are eligible if they served 90 consecutive days. If you served before that, the different requirements become more complicated.
Reserve Service Members
Veterans who were in the Reserves and served 90 consecutive days between 1990 and now are eligible. If you were a reserve service member before 1990, it gets a little fuzzy.
Military Spouses can be certified for a VA loan if their spouse was killed in action, missing in action or a prisoner of war. There are more qualifications, but surviving spouses should be aware of this benefit.
How Long Does it Take to Receive Your VA COE?
How fast you get your COE, of course, depends on how you access the system. Using regular mail, the process can take four to six weeks. Using the online portal on the VA website, you can apply and be approved in a few minutes. Your lender, likewise, can do the work for you in a matter of minutes using the Web LGY system.
Getting pre-approved for your mortgage, through your private lender, has a number of benefits. It helps you know how much you can afford, which cascades into a lot of other decisions as you hunt for your home. Having your pre-approval letter along with the VA home loan eligibility certificate is a great combination as you get more serious about finding a home. It will give you confidence as you make offers on properties, and it tells sellers that you are ready for the next steps.
Save an Average of $3,000 with Homes for Heroes
At Homes for Heroes, our goal is to help all heroes – including military service members – in their journey to find a home. Our lenders are well-versed in VA home loan benefits and the process, documents, and the different ways it takes to secure one.
“Overall great experience. I was able to use the Homes for Heroes program along with my VA Loan and purchased the home of my dreams. The Homes for Heroes real estate agent was phenomenal and I couldn’t be happier. Thank you!” – Stephen, Navy, bought a new house in Texas
When you use a Homes for Heroes mortgage specialist, you can save hundreds of dollars in fees. In addition, if you use one of our affiliate real estate agents, you can get a Hero Rewards check when you close – on average our heroes save $3,000 after they close on a home with our local specialists.
Sign up today to speak with one of our local specialists to get things moving in the right direction.