A VA home loan can be a great deal for service members, veterans and military widows and widowers. But to land one of these zero-down mortgages that are backed by the Department of Veterans Affairs, you'll have to show you qualify.
And that means getting a certificate of eligibility.
Determining your eligibility
A Veterans Affairs loan is a benefit that's not extended to just anybody. If you land one, you're part of an exclusive group!
To qualify, you must have completed one of the following:
- 90 consecutive days of military service during wartime.
- 181 consecutive days of service during peacetime.
- Six years of service in the Reserves or National Guard.
Some surviving spouses of service members also are eligible for the VA loan program.
Getting your certificate
So, you're sure you qualify? Then, there are three possible ways to obtain your certificate of eligibility, that important first step toward getting your loan and buying the home of your dreams:
- Through a lender. Lenders that work with the VA have access to a special database where they can look you up and get you the documentation quickly.
- Apply online. Go to the eBenefits portal operated by the departments of Veterans Affairs and Defense to apply for your certificate.
- Use snail-mail. You can print out an application form, fill it out, mail it off — and wait for the paperwork. (But, uh, why?)
Understanding your certificate
Once you've got your certificate, you probably won't have much trouble deciphering what's on it. There's all the basic stuff: your name, Social Security number, branch of the service, etc., etc., etc.
But look for an important two-digit number: the VA loan entitlement code. It puts you into a category of borrowers, and part of what the code indicates is whether you're exempt from paying the VA funding fee.
That's an upfront, one-time fee calculated as a percentage of your loan amount. Some borrowers don't have to pay it, including veterans who receive compensation for a service-related disability.
One final point about the certificate of eligibility: Just because you've got yours, don't assume you have a lock on getting a VA loan. Your home will still have to pass a VA appraisal, and your credit will still have to pass muster with a lender.