Understanding Your VA loan: How to Request Your COE

You’ve served or are serving your country and are now thinking about homeownership. As a veteran-owned mortgage lender, The Federal Savings Bank wants to serve you by helping you through the VA home loan that you deserve.

We’ll help you find out your eligibility and guide you through the loan process with our knowledgeable and friendly service.

The Certificate of Eligibility (COE) is an essential part of the VA loan process and is easy to obtain. If you’re a veteran, active service member, or qualifying military spouse, we’ll help you reach your homeownership goals.

Let’s review VA loan options, what you can expect in the loan process, and how to request your COE.

Overview of VA loans

VA loans are designed to help active duty, national guard, veterans, and surviving spouses achieve homeownership. Since the U.S. Veterans Affairs back these loans, VA-approved lenders are able to offer more favorable loan terms.

You can purchase a home, refinance, renovate, or build a home with a VA loan. You can also use multiple VA loans throughout your homeownership. For example, you can purchase a home and then later refinance or renovate it with a VA loan.

These loans come with more competitive rates and terms than a conventional mortgage. They also have lower down payments and flexible requirements. Some veterans may be able to qualify for a 0% down payment.

Since VA loans do not have a restrictive credit requirement for eligible borrowers, you can apply with lower credit.

Additionally, VA loans don’t require private mortgage insurance. PMI is usually required for federal or conforming loans if you put down less than 20% of a down payment, to reduce the risk for your lender in the case of a default.

Essentially, you’ll save on your monthly mortgage payments with a VA loan by avoiding PMI.

The VA home loan process

The steps of the VA loan process are similar to conventional mortgages whether you’re taking on a loan to purchase, renovate or build.

• Obtain your COE
• Find and meet with a VA-approved lender
• Get pre-approved
• Find and secure a home with a purchase agreement
• Complete your loan application and secure approval
• Order a home appraisal
• Underwriting process begins
• Close on your VA loan

Requesting your COE

Before you meet with a lender, you’ll want to obtain your COE which can be done online or by mail. Requesting your COE via mail can take longer and possibly even halt your application process if not received promptly.

Getting your COE is an absolute requirement before VA loan approval so give yourself plenty of time. In some cases, your lender may be able to request the COE for you.

Based on your service status, the requirements for your COE vary. For example, if you’re a veteran, you must have your discharge papers on hand to complete your COE request.

If you’re an active service member you’ll need:

• Your social security number
• The date you entered duty
• The duration of any lost time
• The name of the command providing the information

How your COE comes into play with your VA home loan

The COE shows your mortgage lender that you’re eligible for a VA home loan, that’s why it’s necessary to have it before your speak with a lender.

Your COE also outlines how much you are entitled to borrow and if you’ll have to pay the VA funding fee.

VA funding fee

The funding fee is a one-time fee paid at closing that goes back into the program. Disabled veterans and military spouses of veterans who passed in service are eligible for an exemption.

Full entitlement

It’s important to note that you can borrow as much as you need for a VA loan without making a down payment, so long as you qualify and have your full VA loan entitlement. You should have full entitlement if you’ve never used a VA loan before or if you have, you’ve since sold and paid off the previous property. You may also have your entitlement even if you have had a foreclosure or short sale on a VA mortgage – so long as you’ve repaid the VA in full.

Eligible veterans, service members, and surviving spouses with full entitlement, no longer have limits on loans over $144,000. This means you won’t have to pay a down payment, and the VA guarantees your lender that if you default on a loan over $144,000, the VA will pay 25% of the loan amount.

Reduced entitlement

If you’re repaying on a VA loan or have already paid off your VA loan but still own the home, you may have remaining entitlement. In this case, there isn’t a limit on how much you can borrow, but you may have to make a down payment if your loan amount exceeds your entitlement.

Choosing your lender, getting pre-approved, and house hunting

You’ll then select a qualifying lender as not all lenders are approved to provide VA loans.

Once complete, you can begin shopping for a house. A pre-approval letter from your lender will show sellers that you’re serious about buying the home and have secured financing.

When you find a home and your offer is accepted, you’ll sign a purchase agreement with the seller. A purchase agreement is necessary to move forward, as it outlines specific information needed for your VA loan application.

Appraisals, property requirements, and closing

Once you’ve entered a purchase agreement and have a loan commitment from your lender, your lender will order an appraisal from a VA-approved appraiser. They’ll check if the property meets the minimum VA property requirements.

Though they may check for some of the same things, an appraisal is different from a home inspection. You’ll have to separately schedule and pay for a home inspection.

If the appraisal and your application meet your lender’s guidelines and the VA’s criteria, you’ll receive approval and can close on your loan.

Closing will consist of signing off on all paperwork and paying all closing costs on the scheduled day. Closing costs may vary depending on your lender and the state you’re in.

The Federal Savings Bank is ready to serve you

We hope that you now feel more confident and informed about the VA home loan process.

Get started on your VA loan with The Federal Savings Bank.

We’re a veteran-owned agency—we’ve been where you are before and know that you have unique needs. We’re able to provide purchasing, refinancing, and renovating VA loans, and help you meet your goals.

When you’re ready, reach out to us to get started on your VA loan.

Subject to credit approval. Terms and conditions may apply. Subject to VA eligibility requirements. Property insurance is required on all loans secured by property.