If you’re an active-duty service member, veteran or surviving spouse, you’re probably familiar with VA loans. These flexible mortgage products come with competitive terms and other perks that make them attractive. But what is the Certificate of Eligibility (COE) needed to qualify for a loan? This guide dives into the importance of the COE, why it benefits you and how to get one.
What is a VA Loan?
A VA loan is a mortgage product insured by the U.S. Department of Veterans Affairs (VA). It is specifically for active-duty service members, veterans and surviving spouses and is designed to make homeownership more affordable and accessible for those who serve the country.
VA loans stand out for a few key reasons, starting with the ability to secure 100% financing. Plus, you’ll generally get a lower interest rate than conventional loans, and no private mortgage insurance (PMI) requirement exists. These perks equate to sizable cost-savings on your monthly mortgage payments and over the life of the loan.
You must meet specific service requirements to be considered for funding. An honorable discharge is also required unless you qualify as a surviving spouse. And you’ll need to present the lender with a COE before starting the lending process.
What is a VA Loan Certificate of Eligibility (COE)?
A CEO indicates that you’ve satisfied the service requirements to access VA loans.
Eligibility Criteria for a VA Loan COE
Here’s how to qualify:
- Active-duty service members: 90 consecutive days of service
- Veterans: 90 consecutive days of service during wartime or 181 days during peacetime
- National Guard and Reserves: 6 years of service or 90 days of active-duty service
Surviving Spouses may also be eligible if their partner passed away from a service-related disability or while in the line of duty.
The Importance of the Certificate of Eligibility (COE)
The CEO is used to confirm your entitlement or how big of a loan benefit you are eligible for. Your entitlement is then assessed to determine how much you can borrow to buy a home without a down payment.
The Benefits of Having a VA Loan COE
Below is a closer look at the key benefits of the VA COE.
Access to VA Loan Programs
With a VA COE, you can access VA loan programs that help you buy a home without needing a large down payment. These programs are designed to assist veterans, active-duty service members, and their families.
Again, VA loans often have relaxed credit score requirements, making it more feasible for those with lower credit scores to obtain financing. This access enables you to purchase a home without the usual barriers that can come with traditional loans.
Potential for Lower Interest Rates
As previously mentioned, VA loans generally come with lower interest rates compared to conventional loans. This equates to reduced borrowing costs over the loan term, and you could get more affordable monthly mortgage payments.
No Private Mortgage Insurance Requirements
Conventional loans require PMI if you put down less than 20%. PMI can add hundreds of dollars to your monthly mortgage payments and stretch your budget thin. But PMI isn’t required with VA loans, so you can keep more of your hard-earned money in your pocket.
Required Documentation for the VA Loan COE
The VA requires specific documents to provide you with a COE.
Veterans and Active Duty Service Members
- Veterans: DD Form 214
- Active-duty service members: statement of service signed by your personnel officer, adjutant or commander that contains your full name, date of birth, Social Security number, date of entry on active duty, length of lost time (if any) and the name of the command providing the information
National Guard and Reserve Members
- National Guard: DD Form 2214 or NGB Form 22 (if honorably discharged)
- Reserve members: DD Form 214
- National Guard or Reserve members currently servicing: statement of service signed by an authorized official that includes your full name, date of birth, Social Security number, initial date of service, total service credit, lost time (if applicable) and the name of the command providing the information
Surviving Spouses
- VA Form 21P-534EZ
- Veteran’s DD Form 214 (if applicable)
- VA Form 26-1817 (if applicable)
- Copy of the death certificate
- Copy of your marriage certificate
How to Obtain a VA Loan Certificate of Eligibility
You can obtain your COE online, by mail or through the lender.
Applying Online through the eBenefits Portal
Applying online is the fastest and most convenient way to get your COE. You’ll need to use the eBenefits Portal. Here’s a step-by-step breakdown of the process:
- Step 1: Log in using your DS Logon, MyHealtheVet, or ID.me account.
- Step 2: Go to the “Request COE” section once logged in.
- Step 3: Enter your personal identifying details.
- Step 4: Submit the form and await a response. You’ll get your COE immediately if your information is already in the VA’s system.
Applying via Mail
If you prefer to apply by mail, you must fill out VA Form 26-1880. This method is slower but necessary for some veterans. Here’s how to request your COE by mail:
- Step 1: Download and fill out VA Form 26-1880 (Request for Certificate of Eligibility).
- Step 2: Mail the completed form to the address listed for your regional loan center. You can find this address on the last page of the form.
- Step 3: The Department of Veterans Affairs will process your request and send the COE to your address. It could take a couple of weeks to receive it.
Applying through a Lender
Another way to get your COE is through a mortgage lender. Lenders have access to the Automated Certificate of Eligibility (ACE) system, which can simplify the process. To get started:
- Select a lender that is approved by the VA.
- Give the lender your service records and other required documents. The lender will use these to verify your eligibility.
- The lender will use the VA’s ACE system to request your COE.
- You will receive the COE from your lender. The lender will reach out to you if any additional documentation is needed.
Understanding Your COE
Once you receive your COE, here’s what you need to know.
Information Included in the COE
The document includes the amount of your entitlement or the portion of the loan the VA will guarantee. You’ll also notice eligibility conditions and information about your or your spouse’s military service.
How Lenders Use the COE
Again, lenders use the COE to verify your eligibility for a VA loan. It also shows the entitlement, which is then used alongside other factors to calculate the maximum loan amount you can access without a down payment.
Common Issues and How to Resolve Them
You may find that your CEO contains errors or omissions, potentially delaying the lending process. In this case, reach out to your regional loan center promptly to have the issues rectified. Be prepared to provide additional information to substantiate your claims.
FAQs About VA Loan Certificate of Eligibility
You can access it instantly online, but it could take a few days if you go through your lender. If you apply by mail, expect to hear back in a few weeks.
No, the DD214 is a discharge document that shows your service history and release from active duty.
Yes, you can use your COE more than once. You must pay off your previous loan or have your entitlement restored to do so.
