VA loan eligibility requirements

What are the requirements for a VA loan?

VA loans are backed by the government and administered by financial institutions, including banks and credit unions. In addition to meeting all the VA’s loan requirements, you will also need to satisfy the lender’s requirements as well. Each lender will impose their own eligibility requirements for borrowers. You may need a credit score above 620 and a moderate to low debt-to-income ratio to get approved for a VA loan.

VA requirements

VA loans have eligibility requirements you must meet to get approved for a VA loan. Listed below are some general guidelines:

• Served for 90 consecutive days of active service during wartime.
• Served for 180 days of active service during peacetime.
• Served for six years in the National Guard or Reserves or served 90 days (at least 30 days must have been consecutive) under Title 32 orders.

Spouses of a service member who died while serving may also qualify. You may still be able to get approved for a loan even if you don’t meet these requirements. It usually depends on the type of discharge you received. If you were discharged for hardship, including a medical condition or service-connected disability, a reduction in force, or were discharged for an early-out and served at least 21 months of a two-year enlistment, you may still qualify.

You can check your eligibility on the VA website by logging into your eBenefits page or visiting the U.S. Department of Veterans Affairs website.

If you didn’t receive an honorable discharge or were discharged for bad conduct, you won’t be eligible for a VA loan, but you can try applying for a discharge upgrade to change your discharge status. Meet with the Department of Veterans Affairs to learn more about your options.

Before you can get approved for a VA loan, you will need to get a certificate of eligibility (COE), which shows that you meet all the requirements for the VA loan program. You can get a COE by logging into your eBenefits page on the VA website or filling out VA Form 26-1880 by mail.

Most banks and credit unions that provide VA loans should be able to look up your eligibility status in a matter of minutes using your name, social security number and date of birth. The lender may request additional documentation when checking your eligibility status.

Veterans and current or former activated National Guard or Reserves members may need to submit their DD214 or report of separation to get approved. Active duty personnel may need a statement of service.

Current National Guard members or Reserves that were never activated may need a statement of service and an allocated points statement. Discharged National Guard members who never activated may need an NGB Form 22, which is a report of separation and record of service, and an NGB Form 23, retirement points accounting and proof of the character of service.

Discharged Reserves who were never activated will need a form based on where they served. Army Reserves will need a DARP Form FM 249-2E or ARPC Form 606-E. Navy Reserves will need an NRPC 1070-124. Air Force Reserve should use an AF 526. Marine Corps Reserve will need a NAVMC HQ509 or NAVMC 798. And Coast Guard Reserve should use a CG 4174 or 4175.

Spouses of deceased service members will also need a COE. For those receiving Dependency and Indemnity Compensation benefits, you will need to fill out a VA Form 26-1817 and obtain a copy of the Veteran's separation paperwork, such as a DD Form 214.

If you aren’t receiving these benefits, you can apply using the VA Form 21P-534EZ, which must be submitted to your state’s VA Pension Management Center.

Lender requirements

Once you have proven your VA loan eligibility, you will need to satisfy the lender’s borrowing requirements. The VA loan program doesn’t require a minimum credit score or down payment, but some lenders require a FICO credit score of at least 620. You will also need a low enough debt-to-income ratio to afford your monthly payment every month. The lender will need to see proof of income, including W-2s, and tax returns and they will pull a copy of your credit report to see all of your liabilities and confirm your total debt-to-income.

You generally don’t need a down payment for a VA loan but paying off as much of the principal upfront as possible will reduce the amount of interest you accumulate over the life of the loan. You should always shop around for the best home loan interest rate to save money.

Finally, the home you want to purchase must be your primary residence, and you or your spouse must move into your home within 60 days of closing on the property. You can’t use a VA loan to purchase a second home or vacation home.

You will need to fill out the lender’s mortgage application to get started. The approval process can take several days or weeks, depending on the scope of your application. The time it takes to secure a VA loan can take anywhere from 30 to 45 days once you’re under contract on a home.

Getting a VA loan tends to require more paperwork than a conventional loan. You will need to show proof of eligibility to begin the lending process. Make sure you have all your documents organized before beginning your application. Eligibility for a VA loan doesn’t tie you to a particular lender. You are free to shop around for the best rate by comparing the terms and conditions of multiple VA-approved lenders. Contact Ent to learn more about the VA loan application process.