The first of the steps to getting a VA home loan from a lender approved by the Department of Veterans Affairs is to get your VA Certificate of Eligibility or COE. This is the most important step because without it, your VA home loan can’t close. Borrowers must get a VA COE to prove to a lender that they meet the military service or surviving spouse requirements.
Benefits of a VA Loan
A VA loan is a mortgage loan in the United States guaranteed by the United States Department of Veterans Affairs. The program is for American military veterans, military members currently serving in the U.S. military, reservists and select surviving spouses and can be used to purchase single-family homes, condominiums which meet VA guidelines, multi-unit properties, certain manufactured homes and new construction. The VA does not originate loans, but sets the rules for who may qualify, issues minimum guidelines and requirements under which mortgages may be offered and financially guarantees loans that qualify under the program.Steps to Getting a VA Loan
A Certificate of Eligibility is fairly easy to get. You can ask a VA-approved lender to obtain it for you. This is probably the quickest method because most VA lenders have access to an internet-based application that can issue the certificate on the spot if there’s enough information in the system’s database.
You can also request the certificate through the VA’s eBenefits portal. You can even complete a request for Certificate of Eligibility form and mail it to a regional loan center.
Surviving spouses can download a “request for determination of loan guarantee eligibility” form and give it to a lender for processing. If you can’t print the form, you can call 1-877-827-2702 to request one.
Surviving spouses can download a “request for determination of loan guarantee eligibility” form and give it to a lender for processing. If you can’t print the form, you can call 1-877-827-2702 to request one.
Documents Needed to Get a COE
A certificate of eligibility can usually be obtained by a lender entering the borrower’s personal information through the VA database. Sometimes a veteran’s discharge or separation papers are needed for verification, and the lender could send the required documents to the VA to process the request.
Here are the forms the VA website says borrowers will need, depending on their military status:
- Veteran: DD Form 214 (discharge or separation papers).
- Service member: Statement of service signed by your commander, adjutant or personnel officer.
- Current or former activated National Guard or Reserve member: DD Form 214.
- Current National Guard or Reserve member who has never been activated: Statement of service signed by commander, adjutant or personnel officer.
VA Credit Scores
With a VA-backed home loan, the VA guarantees (or stands behind) a portion of the loan you get from a private lender. If your VA-backed home loan goes into foreclosure, the guaranty allows the lender to recover some or all of their losses. Since there’s less risk for the lender, they’re more likely to give you the loan under better terms. In fact, nearly 90% of all VA-backed home loans are made without a down payment.
Lenders follow the VA’s standards when making VA-backed home loans. They may also require you to meet additional standards before giving you a loan. These standards may include having a high enough credit score or getting an updated home appraisal (an expert’s estimate of the value of your home).
The VA does not set a credit score but your lender is likely to do so.
Other Steps to Getting a VA Loan
After you have your VA Certificate of Eligibility, you should interview lenders very familiar with VA lending guidelines. Not every lender understands the steps to getting a VA loan. Next, talk to those VA lenders you identify to make sure you choose the one with whom you are most comfortable.
Finally, interview several Realtors to make sure that you choose a Realtor who is familiar with the VA loan process. In a competitive offer situation, some sellers are reluctant to take an offer which is using VA financing because they are fearful that the appraisal may be excessively stringent or the appraiser may require repairs to be made. A proactive Realtor will help you minimize those concerns so that you can get that home that you have fallen in love with.
If you are in the DC metro area, we at the Lise Howe Group would love to talk to you! With many years of representing buyers, we are very familiar with the VA lending guidelines and we can recommend some great lenders too! We can be reached at 240-401-5577 or lise@lisehowe.com. We look forward to helping you!
