Housing Loan Certificate of Eligibility: Everything You Need to Know

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.

Conclusion

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.