VA Certificate of Eligibility & Entitlement
Guide to VA Loan Eligibility
The VA determines your eligibility and, if you are qualified, the VA will issue you a Certificate of Eligibility to be used in applying for a VA loan. Should you need to request a certificate from the VA, you must complete VA Form 26-1880, Request for a Certificate of Eligibility. You can also apply for a COE online through the e-benefits portal, or your VA lender can request this on your behalf. The following questions and answers will cover the most frequently asked questions concerning the COE:
What service is not eligible?
You are not eligible for VA financing based on the following:
- Active Duty for Training in the Reserves.
- Active Duty for Training in the National Guard (unless "activated" under the authority of title 10, U.S. Code).
What can a veteran do that has lost his or her original discharge papers and does not have a legible copy?
The veteran should obtain a Certificate in Lieu of Lost or Destroyed Discharge. Any VA Veterans Benefits Counselor at the nearest VA office will assist a veteran in obtaining necessary proof of military service.
Does a veteran's home loan entitlement expire?
No. Home loan entitlement is generally good until used. However, the eligibility of service personnel is only available so long as they remain on active duty. If they are discharged or released from active duty before using their entitlement, a new determination of their eligibility must be made, based on the length of service and the type of discharge received.
How much entitlement does each veteran have?
Originally, the maximum entitlement available was $2,000; however, legislation enacted since that time has provided veterans with increases in basic entitlement up to the present maximum of $36,000 (or up to $104,250 for certain loans over $144,000). The $36,000 may, however, be reduced if entitlement has been used before to get a VA loan. The amount of remaining entitlement can be determined by subtracting the amount of entitlement used from the current maximum available entitlement of $36,000. (See question 8 below for information on using remaining entitlement.)
Does VA home loan entitlement provide cash to the veteran?
No. The amount of entitlement relates only to the amount VA will guarantee the lender against loss.
Can a veteran get used entitlement back to use again?
If you have used all or part of your entitlement, you can get that entitlement back to purchase another home if the following conditions for "restoration" are met:
- The property has been sold and the loan has been paid in full, or
- A qualified veteran-transferee (buyer) must agree to assume the outstanding balance on the loan and agree to "substitute" his or her entitlement for the same amount of entitlement you originally used to get the loan. The buyer must also meet the occupancy and income and credit requirements of the law.
- ONE TIME ONLY: if you have repaid the prior VA loan in full, but have not disposed of the property securing that loan, the entitlement you used in connection with that loan may be restored.
Restoration of entitlement is not automatic. You must apply for it by completing and returning VA Form 26-1880 to any VA regional office or center. Application forms for substitution of entitlement may he requested from the VA office that guaranteed the loan.
If the requirements for restoration cannot be met, is there any other way a veteran can obtain another VA loan?
Yes. Veterans who had a VA loan before may still have "remaining entitlement" to use for another VA loan. The current amount of basic entitlement available to each eligible veteran is $36,000. But VA borrowers in most places have an additional layer of bonus entitlement worth $68,250. Most lenders require that a combination of the guaranty entitlement and any cash down payment must equal at least 25 percent of the reasonable value or sales price of the property, whichever is less. Veterans who have another active VA loan or who have defaulted on a previous VA loan may be able to utilize this bonus entitlement.
May several veterans use their entitlement to acquire property together?
Yes. The guaranty is based on each veteran’s interest in the property, but the guaranty on the loan may not exceed 40 percent of the loan amount or $36,000 ($104,250 for certain loans over $144,000).
If both a husband and wife are eligible, may they acquire property jointly and so increase the amount which may be guaranteed?
They may acquire property jointly with VA loans, but they can only combine entitlement up to the maximum guaranty for their county. There’s also no maximum loan amount with VA loans.
May a veteran join with a non-veteran in obtaining a VA loan?
Yes, but the guaranty is based only on the veteran's portion of the loan. The guaranty cannot cover the nonveteran's part of the loan. This does not apply to a loan to a veteran and spouse when the spouse is not a veteran. (Consult lenders to determine whether they would be willing to accept applications for joint loans of this type.)
Does the issuance of a certificate of eligibility guarantee approval of a VA loan?
No. The veteran must still be found to be qualified for the loan from an income and credit standpoint.
If you have further questions about the Certificate of Eligibility, reference these FAQs or contact your nearest VA regional office.