What is the Certificate of Eligibility
Your Certificate of Eligibility (COE) is an important aspect of the VA loan program and it is integral in the process of getting one. You may already know what the COE is, but we’re going to go over everything you need to know about it, including how to get one, what it’s for, and what information will be on it, in this article so you can go to your lender of choice armed with knowledge.
What the COE is and What it is For
The COE is essentially your ticket to get into the VA loan program; it’s your backstage pass that says you have a right to be there and a right to use it. The COE is what the VA uses to communicate to lenders that they approve of this borrower using the VA loan program and that they will guarantee a loan for that borrower as long as it meets their requirements. That’s the main purpose of the COE; to make sure the borrower, the lender, and the VA are all on the same page in terms of the borrower’s eligibility for the VA loan program. The COE also serves other purposes, however. The COE has a good amount of information on it about the nature of the veteran’s eligibility and other information that the lender needs to know in order to get the veteran a VA loan.
What Information Will Be on the COE
First, the COE is proof that the borrower is VA eligible. The COE will have on it the amount of entitlement available to a borrower on the loan. This basic entitlement is $36,000, which means a borrower can borrower a loan up to $144,000. However, this basic entitlement is also usually accompanied by an asterisk that explains additional entitlement may be available to cover 25% of loans up to $417,000 in most areas, and more in some. The COE will also show whether the veteran is exempt from the Funding Fee or not. The COE may also have one or more conditions on it that explain that the veteran is eligible unless something happens. These can be several different things that would require a fair amount of detail, but it usually has something to do with the veteran’s active-duty status or whether they have already been discharged. They may also have to do with the entitlement amount, particularly if the borrower has already used the entitlement once or more. The COE will also have certain identifying information on it such as (shocker) your name.
How To Get One
The easiest way to get one is to ask your lender to do it for you. Lenders have access to an online system that can automatically generate your COE pretty much instantaneously. You do not have access to this system. If you’d like your COE in-hand when you sit down with a lender, you can request your COE via mail by mailing a completed VA Form 26-1880 to the VA, but you shouldn’t do this unless you have a unique and specific need to do so. There’s not generally any need for you to have your COE before you’re sitting down with a lender, and it takes a lender all of 10 minutes to get it generated and printed out so you can move on. Even if you’re pre-qualifying with multiple lenders and they each want a copy of your COE, just let them do it. Make sure to tell them that another lender has already generated and printed out a copy. They may not care, but it’s always good for them to know even if it doesn’t require any action on their part.
Your COE is your proof that you are eligible for the VA loan program, and it shows how much entitlement you have, whether you’re exempt from the Funding Fee, and any conditions that must be met or at least not change in order for you to be approved for a VA loan. Your basic entitlement is $36,000, but you’ll most likely be able to get as much entitlement as you need for a loan of up to $417,000 in most areas, and more in others. The best way to get your COE is to have a lender do it for you, since they can do it very quickly and can even print you out a copy for your records. Please feel free to contact us for more information.