VA home loans are one of the best options available for buyers. They provide potentially 100% financing, affordable housing payments, and flexible guidelines for those that qualify. But, in order to use this valuable home buying tool, one of the borrowers must have sufficient VA entitlement. The amount of entitlement available is a key factor in determining the maximum loan amount and possible down payment. So, how does one determine their entitlement for a VA loan? That’s where the VA certificate of eligibility comes in. All VA lenders require this form prior to closing a VA guaranteed loan. In this article, we are going to explain the form itself, how to get the VA COE, and why it is important to retrieve it early in the process.
VA Certificate of Eligibility Form Explained
Obtaining a VA loan involves the borrowers signing several VA specific forms. One such document is the VA Form 26-1880, which is the official name of the “Request for Certification of Eligibility“. During the VA loan application conversation, several of the questions asked to the applicant are specific to this form. The sections of the 26-1880 are listed below. This is a simple, one-page document with instructions on the back. Estimated completion time is 15 minutes.
VA Certificate of Eligibility Questions
- Veteran identifying & contact information
- Military service details
- VA related disability (if applicable)
- Previous military service (if separated from service)
Usually, the Request for Certificate of Eligibility is completed by the VA lender and the Veteran signs to verify the information. Although, a Veteran may complete and submit the form him or herself.
How to Get a VA Loan Certificate of Eligibility
As mentioned before, using a VA loan requires VA eligibility and there are several ways to obtain the form.
- Online request by VA lender
- Submitting paperwork to VA by VA lender
- Online request by Veteran
- Mailing paperwork to VA by Veteran
The simplest way to receive the COE is for us to make the online request. If the COE is available online, it can be obtained in just a matter of a few minutes. Although for various reasons, the eligibility certificate is not available online. Therefore, submitting the completed and signed form 26-1880 along with any required documentation may be completed by us as well. The response time from VA varies but often we receive the results back in less than a week. Even though VA lenders may take care of this for borrowers, the Veteran may make the request directly to VA. This may be requested online or through the mail.
Certificate of Eligibility Tells A Lot
Many actually think that VA loans may be used just once. But that is far from correct. Not only may VA be used multiple times, it is even possible to have 2 VA loans at once. But, in order for a VA lender to determine VA loan approval including down payment or even just eligibility, the certificate of eligibility is crucial. Actually, the COE states 6 main points which are key to obtaining a VA loan…
- If Veteran has eligibility
- Prior VA loss from short sale or foreclosure
- Existing VA loan that will not be satisfied prior to closing
- Surviving Spouse eligibility
- First time or subsequent use
- Exemption from VA funding fee
We highly recommend verification of the VA certificate of eligibility in the application stage or even before. Each of the 6 reasons above affect the funding fee charged, possible down payment with prior entitlement tied up, as well as VA qualification period. Sometimes, a Veteran may forget a claim filed against their VA eligibility from an old foreclosure. Some even forget if prior loans were VA, conventional, or USDA. So, it is best to verify early and then we are able to provide the most accurate answers up-front.
How Can a VA Loan Help Me? Let Me Count the Ways!
You will hear us often say how VA loans are the best home loans in America. The reasons for VA eligible borrowers to use a VA loan are many. Here are some reminders just in case you didn’t know:
- Primary residence condo purchase
- Manufactured home purchase
- On-frame and off-frame modular home purchase
- Cash out refinance up to 100% of appraised value
- No money down purchase
- Jumbo loan purchase to $1M loan amount
- Higher debt ratios
- No monthly mortgage insurance
- Funding fee waived for disabled Veterans
- Refinance other loan types into a VA loan
- Have multiple VA loans at once (possibly no money down on both)
- Use up to 100% of rent from departing residence towards qualification of new VA purchase
- A qualified surviving spouse may use VA benefits
- Flexible credit – even down to 580 scores
- Seller may pay all customary closing costs
- Seller may pay up to 4% in sales concessions towards many areas for the Veteran
- A high balance loans for counties with higher home costs
- Streamlined refinance to lower payment and/or rate
- Fixed and adjustable rates available
- Flexibility when it comes to prior bankruptcy, foreclosure, or short sale
- VA renovation loan allowing up to $75,000 in improvements
- Buy a home with excess acreage
- Split households where one borrower works and lives a long way from new home
Sounds pretty good, doesn’t it? So, give us a call to see how many of these features benefit you!