A housing loan certificate of eligibility (COE) is a document from the United States Department of Veterans Affairs (VA) that certifies that you are eligible for a VA loan. VA loans are a type of mortgage that is available to veterans, service members, and certain surviving spouses. COE holders can purchase a home with no down payment and more favorable interest rates and terms than conventional mortgages.
Who is eligible for a COE?
To be eligible for a COE, you must meet the following criteria:
- You must have served at least 181 days of active duty service, or 90 days of active duty service during wartime.
- You must have been discharged or released from the military under conditions other than dishonorable.
- You must meet the VA’s credit and income requirements.
How to apply for a COE
There are three ways to apply for a COE:
- Online: You can apply for a COE online through the VA website.
- By mail: You can complete a VA Form 26-1880 and mail it to the VA regional loan center in your state.
- Through your lender: Many lenders can help you apply for a COE.
Benefits of a COE
COEs offer a number of benefits to veterans and service members, including:
- No down payment required: VA loans do not require a down payment, which can make it easier for veterans and service members to purchase a home.
- More favorable interest rates and terms: VA loans typically have lower interest rates and more flexible terms than conventional mortgages.
- Waived private mortgage insurance (PMI): VA loans do not require PMI, which can save homeowners hundreds of dollars per month.
How to use a COE
To use a COE, you must find a lender that offers VA loans. Once you have found a lender, provide them with your COE and complete the loan application process.
Tips for getting pre-approved for a VA loan
Getting pre-approved for a VA loan can help you move quickly when you find a home you want to buy. To get pre-approved, you will need to gather your financial documents, get a copy of your credit report, calculate your debt-to-income ratio (DTI), and shop around for the best interest rates and terms.
Frequently asked questions about COEs
What is the difference between a COE and a VA pre-approval?
A COE is a document that certifies that you are eligible for a VA loan. A VA pre-approval is a letter from a lender that states how much money they are willing to lend you.
How long does it take to get a COE?
The VA typically processes COEs within 5-7 business days.
What happens if I lose my COE?
If you lose your COE, you can request a new one from the VA.
Can I use a COE to buy a home in another state?
Yes, you can use a COE to buy a home in any state.
How do I find a lender that offers VA loans?
There are many lenders that offer VA loans. You can find a list of lenders on the VA website. When choosing a lender, be sure to compare interest rates and fees. You should also ask about the lender’s experience with VA loans.
A housing loan certificate of eligibility (COE) can help you save money and qualify for a mortgage even if you have a lower credit score. If you are a veteran, service member, or surviving spouse, be sure to apply for a COE before you start shopping for a home.