VA Loan Certificate of Eligibility (COE)

Do you know what it means to have a VA Loan Certificate of Eligibility (COE)? This important document is necessary in the lending process when using your VA Home Loan benefit to buy, build, or refinance a home.

Eligible veterans who have met the minimum time-in-service requirements to be eligible for a VA loan can apply online via the VA for their COE, or ask the lender to help.

The COE contains important information for you and the lender including how much VA loan entitlement you have (those who have never used the program have 100% entitlement to use for their home loan), whether or not you are exempt from paying the VA Loan Funding Fee, and much more.

The VA Loan Process: COE First

The VA loan process begins with establishing that you, the borrower, are eligible to apply. This is what applying for your COE is all about–telling the participating VA lender that you are allowed to apply for consideration to get a VA mortgage.

You are not automatically approved for a VA mortgage once you are awarded your COE. All applicants must financially qualify for a VA mortgage loan the same as with any other major line of credit. The COE merely establishes you as an eligible applicant for the loan.

How To Apply For A VA Certificate Of Eligibility

The procedure for applying for a VA COE varies depending on the status of the applicant as an active duty service member, a member of the National Guard or Reserve, etc. Here is the breakdown of application procedures for each category of applicant.

What follows are the requirements for applying for the VA COE–this is NOT the application procedure for a VA loan itself–only the COE which establishes your ability to apply for a VA loan.

VA COE Application Requirements For Veterans

Veterans must submit their report of discharge such as the DD Form 214, or the Guard/Reserve equivalents. Your discharge paperwork must have a section “showing the character of service (item 24) and the narrative reason for separation (item 28).”

Active Duty Requirements

The applicant must submit a current statement of service to the VA, whether that is done personally or via the participating lender. This statement must include:

• Full name
• Social Security Number
• Date of birth
• Entry date on active duty
• The duration of any lost time
• The name of the command providing the information
• The signature of the adjutant, personnel office, or commander of the unit or higher headquarters with jurisdiction over the applicant.

VA COE Application Requirements For Current Or Former National Guard or Reserve Members Who Were Activated For Federal Service

These applicants must submit a report of discharge such as the Guard/Reserve equivalent to the active duty report of separation document DD Form 214. This discharge paperwork must have a section “showing the character of service” and a “narrative reason for separation.”

 Guard/Reserve Requirements (No Federal Service)

 Guard and Reserve members who have never been called for federal service have the following requirements:

• Statement of service from an adjutant, personnel officer or commander of the unit or higher headquarters
• Applicant’s full name
• Social Security Number
• Date of birth
• Duty entry date
• The total “creditable years” of service
• The duration of any lost time
• The name of the command providing the information

Guard/Reserve Requirements  (With Federal Service)

• NGB Form 22, Report of Separation and Record of Service, for each period of National Guard service -AND-
• NGB Form 23, Retirement Points Accounting, and proof of the character of service OR
• A copy (no originals) of the latest annual retirement points statement and evidence of honorable service

Surviving Spouse Application Requirements

VA loans are also made available for certain qualifying surviving spouses. The requirements to apply depend on whether the spouse is receiving Dependency & Indemnity Compensation benefits (DIC).

Surviving Spouses Who Receive DIC

• Submit VA form 26-1817
• Submit the veteran’s DD214 if available
• Include veteran’s and surviving spouse’s social security number on the 26-1817 form

Surviving Spouses Who Do Not Currently Receive DIC

Submit the following to the appropriate VA Compensation and Pension office:

• VA form 21P-534-ARE
• DD214 (if available)
• Marriage License
• Death Certificate or DD Form 1300 – Report of Casualty
• Search for the mailing address for your state to send the VA 21-534 via the following link: PMC States.

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How To Submit An Application For A Certificate Of Eligibility

Once you have all your required documentation as described above, you’re ready to begin the process. You can apply for your VA COE online via the Department of Veterans Affairs e-Benefits portal, or you can apply via your participating lender.

How To Read Your VA Certificate Of Eligibility

There are five basic sections of the VA COE that tell you and your lender a variety of things including whether or not you are exempt from paying the VA loan funding fee, whether you are applying for the first time or not, and how much your VA home loan entitlement is. The five sections include:

• Entitlement Codes
• The VA Loan Funding Fee
• Prior VA Loans (or the lack of)
• Your VA Loan Entitlement Amount
• Conditions

VA Entitlement Codes are used to identify the service member’s requirements for eligibility based on the “era” of service. These eras are broken down by major conflict, periods without major conflict/and peacetime, etc. There are 11 such codes:

• 01 World War II
• 02 Korean War
• 03 Post-Korean War
• 04 Vietnam War
• 05 Entitlement Restored
• 06 Un-remarried Surviving Spouse
• 07 Spouse of POW/MIA
• 08 Post-World War II
• 09 Post-Vietnam
• 10 Persian Gulf War
• 11 Selected Reserves

Eligibility requirements will vary depending on the code, and some codes require specific procedures that others do not.

Un-remarried surviving spouses, for example, will need to work with their participating VA lender to learn how current VA requirements may vary for those with that entitlement code compared to a Gulf War-era service member.

The VA Loan Funding Fee section shows whether the applicant is eligible for a waiver of the VA Loan Funding Fee at the time of the generation of the VA COE. Funding fee waivers are offered to those who receive or are eligible to receive VA compensation for service-connected medical issues.

If there is no official VA rating for the service member at the time of application for the COE, the certificate is generated as though the applicant is NOT EXEMPT. A refund is possible depending on circumstances, but the refund is not automatic. You should ask your loan officer about how to apply for the funding fee refund if you qualify.

The Prior VA Loans section is technically labeled Status. This section tells the lender whether you have a VA loan or not. If you do have a current VA loan, the status will be listed as ACTIVE. This detail is important to the lender because if you have used your VA loan benefits before you may or may not have enough VA entitlement to cover the loan you are applying for now.

If you do not, you may apply to have entitlement restored in some cases depending on circumstances.

The VA Loan Entitlement Amount section helps your lender determine what needs to be done with regard to your entitlement. You can still purchase a home with a VA loan if you do not have full entitlement, but you may be required to cover the difference, apply with a co-borrower, etc. But it all depends on the specific needs and goals of the borrower.

This section tells your lender if you have used your VA loan benefits before, how much entitlement remains, etc.

The Conditions section tells the lender if you have additional requirements. Borrowers who have used their VA home loan benefits before will have a code on their COE in this section indicating that a higher VA Loan Funding Fee is required for subsequent use, for example.

This section is where the lender goes to learn which funding fee level is required (first-time or subsequent use) and to see any other notes about the borrower such as current exempt status for the VA loan funding fee, etc. This section even tells the lender whether a borrower’s entitlement needs to be restored to apply for the new loan.

Joe Wallace is a 13-year veteran of the United States Air Force and a former reporter for Air Force Television News