Am I Eligible for a VA Loan?

Colin GrubbMar 23, 2017

Veterans, Active Duty Service members, National Guard & Reserve Members, and their spouses,  can all qualify for VA Loans given they have suitable credit and income, and can obtain a Certificate of Eligibility (COE). Getting a COE depends on the length of your service, the time period in which you served, and other factors.

Active Duty Servicemembers

Anyone currently on active duty for 90 continuous days or more can obtain a Certificate of Eligibility. You will need a current statement of service that contains your name, date of birth, date you started active duty, documentation of any lost time, and social security #. This has to be signed by the commander of your unit, personnel office, or adjutant.

Veterans

A veteran can get a COE if they were not dishonorably discharged, and meet the service requirements in the below table regarding specific wartime and peacetime periods.

WWII

If you were on active duty for 90 total days between 9/16/1940 – 7/25/1947

After WWII

If you served 181 or more continuous days between 7/26/1947 and 6/26/1950

Korean War

If you were on active duty for 90 total days between 6/27/1950 - 1/31/1955

After the Korean War

If you served 181 or more continuous days between 2/1/1955 - 8/4/1964

Vietnam War

If you were on active duty for 90 total days between 8/5/1964 - 5/7/1975.
If you served actually in the Republic of Vietnam the start date is 2/28/1961

After the Vietnam War

If you served 181 or more continuous days between 5/8/1975 - 9/7/1980.
End date for officers is 10/16/1981

Served in the 80s

If you served 24 continuous months or the full period for which you were called to active duty between 9/8/1980 - 8/1/1990. Start date for officers 10/17/1981.

Gulf War

If you served 24 continuous months or the full period for which you were called to active duty between 8/2/1990 – Present.

 

If you are a veteran who satisfies these criteria you will need to complete a DD Form 214.

National Guard and Reservists

In order to qualify for a COE you must have 6 years of service and have been discharged honorably or placed on the retired list. You can also qualify if you were transferred to the Standby Reserve or Ready Reserve. If you were activated at any time you must complete a DD Form 214 to obtain a COE. If you have never been activated, you must submit a NGB Form 22 or 23.

Spouses

Spouses of veterans can also apply for a COE if the spouse has not remarried, and the veteran died either while serving or due to a service-related disability. Spouses who have remarried must have done so after age 57 and remarried after 12/16/2003. Spouses of veterans missing in action or prisoners of war also qualify, as well as surviving spouses of totally disabled veterans whose disability may not have been the direct cause of death.

What is a VA Loan?

VA Loans were one of the benefits extended to veterans in the Servicemen’s Readjustment Act, which was passed in 1944 near the end of the Second World War. VA Loans are typically not issued by the government; they are ordinary mortgage loans that are insured by the government. This provides substantial benefits to servicemembers.

What are the Benefits of a VA Loan?

Because the federal government guarantees VA Loans, they do not require mortgage insurance. This could translate into thousands of dollars in savings a year. Also, a VA Loan can be obtained without a down payment and are generally a lot easier to qualify for than a conventional mortgage.

VA Loans were created to make it easier for current and former members of the United States military to purchase a new home, or refinance their current home. Aside from no mortgage insurance and no downpayment, the fees are also more affordable than a typical mortgage. There is a funding fee, that is calculated by factoring in your downpayment (if any) and your military status.

With zero downpayment, the fee would be about 2.15% of the loan. With a 10% or more down payment, this fee goes down to 1.25%. If the veteran is currently receiving disability there is no fee.

Another advantage of this program is that the VA itself will act on your behalf if you are struggling to make your monthly mortgage payment. The department has dedicated staff in every state that can negotiate with the lender to set up payment plans or modify the loan so it is more manageable given the servicemember’s situation.

If you are an active or former member of the US military, or a spouse, and you fit the obligations to obtain a Certificate of Eligibility, a VA loan can save you big time. And because of the fewer restrictions, it might even allow you to purchase a home you’d typically not qualify for under a traditional mortgage. Check out our Top Ten VA Loan Providers to see who has the best deal for you.