What is a Certificate of Eligibility for a VA Home Loan?

The short, simple answer is: a Certificate of Eligibility (COE) is what a mortgage lender needs to prove a veteran or active-duty service member is eligible for a VA Loan. But that may not mean much without answering some other questions as well. So here are the basics of VA eligibility and the COE.

The VA guarantees, it does not lend.

The VA does not actually lend any money. Instead, they insure the lender for a portion of your loan, 25% to be exact, so if you default on the loan the lender isn’t at risk of losing as much money and is willing to provide veterans home loans with as little as $0 down payment.

There are qualifications and requirements.

Simply having served in the Armed Services is not enough, there are time requirements and character-of-service requirements:

  • 181 days of continuous service during peacetime
  • 90 days of continuous service during wartime
  • Currently on active duty for more than 90 days
  • 6 years of Reserve or National Guard service
  • Must have been discharged under conditions other than dishonorable

Surviving spouses may also qualify under certain conditions.

Eligibility is limited but often reusable.

The VA sets limits on the maximum amount they will insure (or guaranty) for a veteran. This amount is referred to as your “entitlement.” The amount of entitlement you have is not very straightforward either; but, to keep things simple, if you have never used it before, you will generally have enough entitlement to be eligible to purchase a home at a sales price up to the published Fannie Mae maximum loan limits in your area; provided you qualify, of course. In some areas, known as high-cost areas, the entitlement may be extended above that limit as well and, to confuse things even more, many lenders will allow you to borrow beyond even those limits if you put down 25% of the difference between the maximum loan limit and the sales price of the home you are purchasing.

If you pay off your VA loan, the entitlement used to guaranty that loan can be restored, meaning you may use it again to purchase another home. In fact, in some cases, you may be able to use your entitlement to purchase and own multiple homes at the same time. This, again, is a situation where the calculations can get very complicated. Contact me for more specific information based on your current situation.

How to get your Certificate of Eligibility.

First, you should know you do not have to unless you really want to. VA-approved lenders have access to the VA’s online system to obtain COE’s for most veterans. In the event that your COE cannot be processed through the online system, we will help you order one by mail.
If you would like to get the COE yourself, you can use the VA’s eBenefits (link: https://www.ebenefits.va.gov) portal to request it or you can complete VA Form 26-1880 (link: https://www.vba.va.gov/pubs/forms/vba-26-1880-are.pdf) and mail it, along with the verification documentation below, to:

VA Loan Eligibility Center Attn: COE (262)
PO Box 100034
Decatur, GA 30031

To obtain a COE, an active-duty servicemember or current member of the Reserves or National Guard will need a Statement of Service including your name, social security number, date of birth, entry date of duty, total years of service, duration of any lost time, and the name of the command providing the information. The Statement of Service must be signed by a unit commander or personnel officer.

Discharged members of the Armed Services must provide a copy of their DD214.

The VA Home Loan is almost always the most cost-effective financing option for those who are eligible to use it. It is an outstanding loan program providing affordable payments to our nation’s servicemembers and veterans. Eligibility can be confusing in certain situations, but for most people who simply buy one home at a time and pay off their VA loan each time the sell their home, the VA loan program will most likely always be an available option to purchase your next home.