In order to be eligible for a VA loan, either you or your spouse must meet some basic service requirements set by the Department of Veterans Affairs and have a Certificate of Eligibility.
Eligibility for a VA Loan
There are different eligibility requirements, including completing 90 days of active service during a war or 181 days during peace.
You can also qualify if you have had six years of service in the National Guard or Reserves. If you are a spouse of a service member who died in the line of duty, you can also qualify.
Certificate of Eligibility
You don’t need to have a Certificate of Eligibility (COE) when you go to apply for a VA loan but it is an important part of loan eligibility. This provides the lender with information that you are eligible for the loan benefits.
It’s not necessary before you apply since most lenders will put this through the automated system. There are different ways you can get this certificate. You can apply through a VA approved lender or apply through the benefits portal or by mail.
The process takes minutes to complete and will ensure that your financing can go forward without a lot of delays. There are some documents that you need to get a COE. You would need different forms if you served in the regular military or the National Guard.
Getting one as a surviving spouse will depend on whether or not you are getting Dependency and Indemnity Compensation.
Those spouses that are getting this will be requested to fill out one form and those not getting the benefits will need to fill out a different form. You will also need to have copies of your marriage license and the death certificate.
Additional VA Loan Requirements
The VA does determine the guidelines for loan eligibility, but private lenders will also have extra set of guidelines that potential borrowers must meet, such as sufficient reliable income, acceptable levels of debt, and a credit score that meets requirements.
The property also needs to satisfy the appraisal process, such as one set by the VA. The appraisal looks at the home’s fair market value and the condition.
Income and Credit Requirements
While the VA doesn’t set a minimum credit score, individual lenders do. The VA credit score requirements will vary by lender and most lenders usually require a minimum score of 620.
The VA does require that borrowers have a certain amount of income that is left over each month after they have paid their major expenses.
This excess is needed to cover typical family expenses. By enforcing these requirements, the VA then increases the chances that borrowers will have sufficient income to meet financial obligations and still have money left over for an emergency.
Applying for a VA Loan
The loan process can take about 20 to 45 days once you are under contract on a home, but every buyer has a different situation. Applying for a loan won’t obligate you in any way.