26 May Qualifying For A VA Home Loan
Created in 1944 to help service members transition into a civilian lifestyle, VA home loans are no-down mortgage opportunities available to former/active service members. To qualify for a VA loan, you must meet certain eligibility requirements laid by the VA, have a valid COE, and fulfill the lender’s credit requirements.
VA LOAN ELIGIBILITY REQUIREMENTS
You must meet either of the following requirements to qualify for a VA mortgage-
- You are a current/former service member who has served at least 90 days during wartime, OR
- You are a current/former military member who has served at least 181 days during peacetime, OR
- You are a member of the reserves with at least six years of experience, OR
- You are a spouse of a Veteran who went MIA, was a POW or died on-duty or through a service-connected ailment/disability.
CERTIFICATE OF ELIGIBILITY (COE)
COE is one of the most important documents as it provides your lender a validation that you are eligible for a VA loan. There are three ways to apply for a COE-
- Applying through a private lender
- Applying online through the e-benefits portal
- Applying through the mail by filling out VA Form 26-1880
To apply for the COE as a Veteran, you will need to submit DD Form 214. For active duty, you must submit a statement of service signed by an official.
Applying as a national guard and reservist would require you to fill out the NGB Form 22 and 23.
Applying for COE as a spouse depends on whether you receive Dependency and Indemnity Compensation (DIC) or not. If you receive DIC, you must submit VA Form 26-1817 and your Veteran’s separation documents like DD Form 214.
If you do not receive DIC, you’ll need to submit VA Form 21P-534EZ to your region’s VA Pension Management Center.
INCOME AND CREDIT REQUIREMENTS
One must remember that being eligible for the loan does not mean you can qualify for it. Getting your COE to prove your eligibility is just a part of the VA loans application process. You must also meet your lender’s income and credit requirements.
While the VA does not require its applicants to have an outstanding credit score, you must have a minimum score of 620. Moreover, you should have enough residual income and a debt-to-income ratio of less than 41% to meet all VA loan eligibility requirements.