VA loan eligibility differs from qualifying. To see if you qualify, you must first determine if you’re eligible. In short, you must have served in the military, Reserves, National Guard, or be a spouse of a veteran that lost their life due to their service.
Time Served
To be eligible for a VA loan, you must have served adequate time in the military. You must meet one of the following to meet the time served requirements:
- 90 days during wartime
- 181 days during peacetime
- 6 years of service in the National Guard or Reserves
- Your spouse died while in the line of duty
Discharge Type
Your discharge type also determines your eligibility. Even if you had enough time served, but don’t meet the discharge requirements, you may not be eligible.
Overall, you should have any type of discharge except dishonorable, but this also includes being discharged for a hardship, for a medical condition, or an early-out, but you served at least 21 months of a 24-month enlistment.
Obtaining your Certificate of Eligibility (COE)
To prove your eligibility for a VA loan, you’ll need your Certificate of Eligibility. There are a few ways to get it, and you don’t need it to get pre-approved, but will need it to close on your loan. The COE is what tells lenders you meet the minimum service requirements and are eligible for a VA loan.
There are three ways to get your COE.
Apply Through the eBenefits Portal
You can log into your VA eBenefits portal and secure your COE. The system walks you through the process and you’ll receive your certificate quickly.
Send VA Form 26-1880 to the VA
You can complete VA Form 26-1880 and send it to the address on the form. This method takes the longest to get your COE because you’re dealing with snail mail and manual processing of your form.
Ask your Lender
Many lenders can secure your COE for you with just your social security number and birthdate. They can receive the COE instantly, moving the underwriting process along faster.
Surviving Spouses and COEs
Surviving spouses have two ways to secure a COE. It depends on one factor – are you receiving Dependency and Indemnity Compensation? No matter which forms you complete below, you must also provide your veteran’s death certificate and your marriage certificate to get a COE.
If you are, complete VA Form 26-1817 (as long as you are unmarried) and provide a copy of your veteran’s separation paperwork.
If you aren’t receiving Dependency and Indemnity Compensation, complete VA Form 21P-534EZ and send it to your local VA Pension Management Center.
How Eligibility Differs from Qualifying
You might think if you’re eligible you qualify for a loan, right?
That’s not how it works.
They are two different scenarios. When you are eligible, it means the VA will guarantee your loan because you earned the VA home loan benefit.
To qualify, though, you must prove you can afford the loan. This means you must prove you meet the lender’s credit requirements, have a low enough debt-to-income ratio, have stable income, enough assets, and enough disposable income to not be a high risk of default.
An underwriter will determine if you qualify for the loan, but the VA determines if you’re eligible.
Do you Need a COE to Apply for a Loan?
Applying for a VA loan happens in a couple of steps. While you don’t need your COE to apply for a loan, it’s a good idea so you know if you’re eligible or not. If you’re not eligible, there are many other loan programs for you to use.
If you don’t have your COE during pre-approval, that’s okay, but you’ll need it before you can get too far into the underwriting process. The sooner you obtain your COE, the faster you can close on your loan.
