I Have A Certificate Of Eligibility – What Exactly Does That Mean?

Getting your Certificate of Eligibility doesn’t mean your guaranteed to receive a loan.  There is often confusion on what exactly a Certificate of Eligibility is.  Read on for some commonly asked questions and answers that may clear up some confusion.

1. Can I use my Certificate of Eligibility for anything besides purchasing a home?

No, your Certificate of Eligibility is specifically for the purchase of a primary residence. It cannot be used for any other purpose.

2. How long can I use my Certificate of Eligibility (COE) for?

Your Certificate of Eligibility is good until you use it. However, many mortgage lenders will require you to get an updated one within 60 days of your closing to verify you have not used it.

3. I was informed every Veteran is guaranteed a home loan. Is this true?

No. Every Veteran that meets the service requirements is guaranteed eligibility for a VA Home Mortgage Loan. However, borrowers must also qualify for a VA Mortgage Loan based on income and credit requirements.

4. How many years did I need to serve in the military to qualify?

A number of factors contribute to the service time requirement, including if you are reserve or active. During wartime you need to have served 90 days and during peacetime you will need 181 days. This can differ depending on different circumstances.

5. Can anyone else be on my VA Mortgage Loan?

The only people allowed on a traditional VA Mortgage Loan are the eligible Veteran or active duty member and his/her spouse. There are also some joint VA Mortgage Loans that allow two eligible Veterans to be on the same mortgage to have died while on active duty or due to a service related disability. If so, you are also exempt from the funding fee.

8. Can I put my girlfriend or boyfriend on the VA Mortgage Loan?

No. For a true VA Loan the only person that can be on the mortgage loan with you is your spouse.

9. I am deployed. Is it still possible to purchase a VA home?

Yes, you can still purchase a home if you are deployed. It will need to be your primary residence when you return.

10. Am I eligible if I am in the National Guard?

Yes, you will still be eligible if you are in the National Guard as long as you meet the service requirements for the loan. The service requirements for National Guard are 181 days of service. Without being activated that corresponds to about 6 years of service in the guard.

11. If I was injured my second day of basic training and left the Military am I eligible for a VA Home Loan?

Yes, you should be. If you have a medical discharge from the Military you should be eligible to use you VA Mortgage Loan benefits.

12. I have a dishonorable discharge can I still qualify for a VA Mortgage Loan?

No, in most cases an honorable discharge is required for eligibility. However, other discharges, such as medical, are eligible.

13. What are the age limits for VA Mortgage Loans?

There are no age limits on a VA Mortgage Loan, if you qualify based on income and credit you are eligible for VA guaranteed financing.

14. Can I get a VA Mortgage Loan if I am self-employed?

Yes, you can get a VA Mortgage Loan if you are self-employed. You do have to prove your income and history of receiving it. You will need 2 years of tax returns to prove your income. If you haven’t been self-employed for 2 years total, you might have trouble proving your income.

15. I have used my Certificate of Eligibility before, am I still eligible?

Yes, you can use a VA Mortgage Loan as many times as you want. When you use it for a second time you will have an increased funding fee depending on your status. You need your entitlement restored from your previous use or have enough entitlement left to cover your new purchase or refinance. To fully restore entitlement, your previous or current VA Mortgage Loan will have to be paid in full.

16. If I have no credit can I still get a VA Mortgage Loan?

Yes, you can still get a VA Loan because having no credit is not a sign of bad credit. You will have to prove that you have been paying on four items with no problems for the last 12 months. Items can include: Rent, cable, electric, insurance, cell phones, and any other liability that you can prove timely payments on a monthly basis.

17. My credit is good; my spouse’s is bad. Can we still get a VA Mortgage Loan?

It is possible that your good credit could be a strong enough compensating factor to get you approved.

18. Can I have more than one VA Mortgage Loan at a time?

Yes, it is possible to have two VA Mortgages at one time. If you currently have a VA Mortgage you have to have sufficient entitlement left on your COE to buy another one. If you do not have sufficient entitlement, you will not be able to do so.

19. Is refinancing my VA first Mortgage an option if I have a second Mortgage?

Yes, you can refinance your VA Mortgage and sometimes even get cash out if you have a second mortgage. The company that has your second mortgage has to agree that they are fine with this before you can proceed.

20. If I have a conventional mortgage loan is it possible to refinance this into a VA Mortgage Loan?

Yes, but you will need the necessary equity in your home to do so. The maximum the VA Mortgage Loan can go is up to 90% of your appraised value, so if your current conventional loan is over 90% then you would not be able to transfer it into a VA Mortgage Loan.

21. Can I refinance my house up to the full appraisal amount or 100% loan to value (LTV) with a VA Mortgage Loan?

No, you can only go up to 90% of your home’s value with a VA Mortgage Loan and sometimes, based on the value of your home, it will be under 90%.

22. I have a tax lien on my credit report can I qualify for a VA Mortgage Loan?

You can qualify for a home loan with a tax lien on your credit report, but it will have to be paid off before you are able to close. Lenders will often allow you to satisfy the tax lien on the day of closing.

23. The bank foreclosed on my first house which had a VA Mortgage Loan, can I still qualify for another VA Mortgage Loan?

Yes, it is possible to get another VA Mortgage Loan, but it depends on the foreclosure cost to the bank. You will most likely have reduced entitlement and have to pay the VA back before you are eligible to get your entitlement restored.

24. I had a bankruptcy 2 years ago, how long do I have to wait in order to be eligible for a VA Mortgage Loan?

Depending on the chapter you filed you will have to wait between 12 and 24 months from discharge before you can use your VA benefits to buy a home. On a Chapter 7, you have to have the bankruptcy discharged for 2 years (24 months). On a Chapter 13, it has to have been discharged for 12 months or if it is not discharged you have to prove that you have made timely payments on it for a minimum of 12 months.

25. Can I get a VA Mortgage Loan for the purpose of paying off debt?

You can get cash out on the equity of your home with a Veterans Affairs Refinance. You can use that cash out to pay off any debt that you would like. You cannot get cash out of a purchase to pay off debt.

26. I’m looking at some business/commercial property, can I use a VA Mortgage Loan to purchase it?

No, a VA Mortgage Loan may only be used for residential property.

27. We’re looking at some rental/investment properties can we use a VA Mortgage Loan to purchase them?

No, you cannot use a VA Mortgage Loan to purchase an investment property. A VA Mortgage Loan may only be used for a primary residence. Under certain conditions you may use a Streamline VA Refinance on an investment property. This can be only be done if you have a VA Mortgage Loan for a property that you previously lived in and are now renting out.

28. Can I purchase homes at a foreclosure auction with my VA Mortgage Loan?

Yes, you can purchase a foreclosed property at auction. Keep in mind that the appraisal will have to come back with no repairs needed or if repairs are required they will need to be fixed before the closing.

29. Can I use my VA Mortgage Loan to purchase land to build a house on?

You cannot buy only land with your VA Loan. The VA does guarantee construction loans, but many lenders do not offer these at this time.

30. Can I purchase a condo with my VA Loan?

Yes, you can buy a condo with your VA loan. Keep in mind that it has to meet certain criteria to be VA approved and needs to be in a VA approved condominium complex.

Please note, these are general guidelines regarding VA loans.  Your mortgage lender may have different policies with regards to your loan; check with them directly on specific mortgage questions.

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