Receiving veterans benefits isn’t an automatic thing. You have to be eligible for them. This means you must have enough time in active duty or as a member of the National Guard or Reserves to qualify. In some cases, spouses of veterans who died while in service may be eligible too. The VA has the final say in who is and isn’t eligible, but we provide the basic guidelines below.
Basic Eligibility Requirements for Veterans Benefits
Basically, you must meet one of the following in order to qualify for veterans benefits:
- Serve a minimum of 90 days during wartime
- Serve a minimum of 181 days during peacetime
- Serve a minimum of six years in the National Guard or Reserves
- Be married to a veteran that died in the line of duty
- Be married to a veteran that died as a result of a disability caused by his time in active duty
These are the basic guidelines. Next, you must apply for your Certificate of Entitlement.
The Certificate of Entitlement
The COE, or Certificate of Entitlement, is what lenders use to process your VA loan. Without the COE, they don’t know that you are eligible for benefits. It’s the proof they require to move forward with your loan, even if you have been pre-approved for a specific loan amount.
You have several ways that you can apply for the COE:
- Request the certificate yourself through the mail with VA Form 26-1880. This method could take between 4 and 6 weeks for the certificate to arrive.
- Apply online through the eBenefits Portal. This is usually a much faster way to get your COE.
- Let your lender apply for the COE for you. As long as you use a VA approved lender, this is usually the fastest method.
Once you have this certificate, you can move forward with your process. The next step is determining if you qualify for the program.
Qualifying for the VA Loan
Just being eligible for the VA loan doesn’t mean you qualify for it. You’ll have to prove you can afford the loan with proper proof of your income and debts.
The VA doesn’t focus on credit scores or even debt ratios. They focus on the amount of disposable income you have each month and your ability to pay the mortgage. They have strict guidelines regarding how much money families of each size in each region of the United States must have in order to qualify.
However, many lenders have additional requirements on top of what the VA requires. It’s not unusual to find lenders that require:
- Minimum 620 credit score
- Maximum 43% debt ratio (or lower sometimes)
- Consistent employment and/or income for 2 years
The lender can add whatever overlays they deem necessary. They may do it on a case-by-case basis or have requirements they have across the board.
Finding a VA Loan
You don’t have to use a specific lender when looking for a VA loan. You are free to shop with any VA approved lender. In fact, it’s best if you receive quotes from at least three lenders so that you can compare your options.
If you have unique circumstances that some lenders don’t approve of, don’t give up. There are many other options out there. You can look online as well as apply in person. Just make sure you use lenders that are well-versed in VA loans and can help you every step of the way.
When you find the right VA lender and have proof of your eligibility for VA benefits, you are well on your way to getting a 100% LTV loan. It’s a great way to start homeownership without eating into your savings.