A VA home loan comes with many benefits, the biggest being no requirement for a down payment. Veterans and service members also don’t have to pay monthly mortgage insurance premiums, and interest rates on VA loans are usually lower than other loan types.
The first step in getting a home loan from a lender approved by the Department of Veterans Affairs is the most important one because without it, your VA home loan can’t close. Borrowers must get a VA Certificate of Eligibility, or COE, to prove to a lender that they meet the military service or surviving spouse requirements.
Once you have that document, you can start shopping for VA loans.
A COE 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.
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 loans have lenient credit requirements, though you’ll still need decent credit and sufficient income to get approved.
The VA doesn’t set a minimum credit score to qualify for a loan, but it must “review the entire loan profile to make a lending decision,” according to the VA. That could allow each lender to have its own FICO credit score requirement.
Lenders can also add requirements to the VA qualifications. These can include a range of the number of credit accounts you can have to the number of reported late payments in a specified timeframe. Some lenders may require higher credit scores than others. As with any type of home loan, it can be worthwhile to shop around.