Va Home Loan Approval Letter - VA Certificate of Eligibility (COE): Why it's important and how to get it Your Certificate of Eligibility (COE) verifies that you meet the military service requirements for a VA loan. However, not everyone knows that there are many ways to get a COE - some easier than others.
The VA requires lenders to provide proof of a veteran's military service during the VA loan process. The Certificate of Eligibility (COE) serves as proof and tells the lender that the applicant has officially met the VA military service requirements.
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That said, one of the most important things to know about COE is that you don't need a COE in hand to start the VA loan process.
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It is entirely possible to start the VA loan process and even get pre-approved without a COE. However, you or your lender must receive the document before closing. Any delays or questions regarding military veteran status in the future may delay the closure or even change the entire process.
A Certificate of Eligibility (COE) is a document from the Department of Veterans Affairs that confirms your eligibility for the VA loan program. The COE also tells you the eligibility of the VA loan and whether you must pay a VA financing fee.
There is more than one way to obtain a COE and although it is a short and simple document, it can cause a lot of confusion. Let's clear up some of the most common questions about the certificate of eligibility.
In most cases, the easiest way for veterans to obtain a certificate of eligibility is to ask the lender to pull it directly from the government's automated database. Lenders can often do this using the veteran's social security number and date of birth. Depending on the nature of your service and other factors, additional documentation may be required, including Form DD-214, also known as a Certificate of Discharge or Release from Active Duty.
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Overall, Member Copy 4 is the preferred copy of the DD-214 as it contains the most detailed information about the veteran's service. You can decide which copy to send by looking at the bottom right corner of the document.
How to get DD-214? The US National Archives provides this portal where you can apply for an online form.
There is no standard form or format for a service summary, but this summary of information is common. The letter should be on official military letterhead.
The Reserves and the National Guard do not have a single exemption certificate like the DD-214. Instead, they should submit the most recent annual statement of pension levels along with proof of their meritorious service.
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Members of the Army or Air Force may file an NGB Form 22, Separation and Service Record Report, or NGB Form 23 Points Statement.
Like their military counterparts, active-duty members of the Reserve or National Guard must submit a signed declaration of service that includes the required personal information. The statement should also clearly state that the applicant is an active reservist or ranger.
To receive a certificate of eligibility as a surviving spouse, you must first receive maintenance and compensation benefits. If you are not receiving child support and compensation, you will need to complete VA Form 21P-534EZ, survivor's benefits and/or accrued benefits. Once approved, follow the steps below.
If you are receiving alimony and compensation, you will need to complete an Application to Determine Loan Guarantee Eligibility - Unmarried Spouses (VA Form 26-1817). You will also need a copy of the commander's DD-214 or other acceptable separation papers.
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Once you receive your eligibility certificate, you'll notice a number of details, including your name, Social Security number, branch of service, and even the name of the VA employee who issued you the COE.
Most of them are clear and simple, but there are some things you may not know. The part that often leads to questions from potential VA borrowers is the so-called eligibility code.
This two-digit number gives VA lenders more information about your military service history and whether you may be exempt from the VA funding fee, which is an upfront cost that goes directly to the Senate.
Borrowers receiving service-related disability benefits, active Purple Heart beneficiaries, and eligible surviving spouses do not have to pay this fee.
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There are 11 possible VA entitlement codes that you can find out about here. Most entitlement codes are for military service. But important for veterans who have used VA loans in the past is eligibility code 05.
This entitlement code indicates that the borrower previously obtained a VA loan, repaid the loan in full, and regained the right to use the property. Borrowers who have used a VA loan in the past will be required to pay a higher finance fee for future VA purchases, unless their eligibility certificate indicates that they are exempt from the fee.
Speak to your loan officer if you have questions about your eligibility code or if you think your code is incorrect.
The time it takes to receive a certificate of eligibility varies depending on how you apply. Applying for a COE by mail can take 4 to 6 weeks, but usually it only takes a few seconds to apply online or with a lender.
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See the photo below. The certificate of competence is a relatively simple document that contains basic information such as:
It's no big deal if you lose your COE. You can apply for a new one using the three methods listed above.
If there's one thing a certificate of eligibility isn't, it's insurance. The word "guarantee" is often thrown into the discussion of VA loans, but to be clear, no one is guaranteed to receive a VA loan just by meeting basic service requirements.
The COE simply means that you have cleared one obstacle in your way - namely that you have met the requirements of military service. Your property must still meet the VA criteria and the borrower's qualifications (credit score, income, debt) must meet the VA and lender standards.
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If your lender cannot automatically obtain a certificate of eligibility, it could be for a number of reasons, which may include:
Don't panic if you find yourself in this group. This happens sometimes, and VA-savvy lenders usually know how to handle it. In these cases, the lender will typically request a DD-214 or score statement and send it directly to the VA for evaluation.
Your qualification certificate does not expire. However, don't expect to reuse your old COE if you're just starting the rental process. Your lender will need to confirm your eligibility code. In addition, you may need a new COE if you received your first one on active duty.
Do you have other questions about COE? Leave them in our comments section below or contact a Veterans United Loan Specialist at 855-870-8845.
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A licensed realtor and former lender and attorney, Samantha has insider experience dealing with VA loans, from initial application and contracts to loan financing. Most real estate buyers have heard that they need to be pre-qualified or pre-approved. a mortgage if you plan to buy real estate. These are the two key steps in the mortgage application process. Some people use the terms interchangeably, but there are important differences that all home buyers should understand. Preliminary preparations are only the first step. It gives you an idea of how much credit you are likely to qualify for. Pre-approval is the second step, a conditional commitment to actually grant the mortgage.
"The prescreening process is based on data submitted by consumers," said Todd Kaderabek, a housing broker affiliated with Beverly-Hanks Realtors in downtown Asheville, North Carolina. "Pre-approval is the consumer's verified data - for example, a credit report."
Getting prequalified involves providing your bank or lender with a complete financial picture, including debts, income, and assets. The lender checks everything and gives an estimate of what the borrower can expect. Pre-screening can be done over the phone or online and usually comes at no cost.
Pre-selection is quick, typically it only takes one to three days to receive your pre-qualification letter. Please note that credit pre-qualification does not include an analysis of credit reports or an in-depth examination of the borrower's ability to purchase a home.
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The first stage of the initial selection is to discuss your mortgage goals or needs. The lender will explain the different mortgage options and recommend the type that may be most appropriate.
Mortgage discrimination is illegal. If you believe you are being discriminated against because of your race, religion, gender, marital status, use of public assistance, national origin, disability or age, you can take action. One such step is to file a report with the Consumer Financial Protection Bureau or the US Department of Housing and Urban Development (HUD).
The re-prequalified amount is not certain as it is based solely on the information provided. This is just the amount a borrower could expect. A pre-qualified buyer does not carry the same weight as a pre-qualified buyer who has been further investigated.
However, pre-selection can be useful when submitting an offer. “A pre-selection letter is almost required for a bid for
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