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What are the Requirements to Secure a VA Loan?

In order to be eligible for a VA loan you must meet one or more of the following minimum military service requirements:

• You served 90 continuous days of active duty

• You served 181 days of active service during peacetime

• You served 6 years in the National Guard or Selected Reserve

• You’re the surviving spouse of a service member who died in the line of duty or died due to a service-related disability

If you don’t meet these minimum service requirements you may still qualify if you were discharged due to a medical condition or a service-related disability. You may also still qualify if you served at least 20 months of a two-year enlistment.

If you’re still not sure if you are eligible, contact a VA lender directly.

What Is A Certificate of Eligibility?

Above we detail the minimum service requirements needed in order to qualify for a VA loan but lenders will also need a Certificate of Eligibility (COE) which confirms that you meet the minimum requirements to get a VA loan.

Often lenders can obtain your COE just by your date of birth and social security number. That being said, you can still begin the application process for a VA loan before you have your COE.

What Documents Do I Need?

To obtain your COE, you’ll need to provide documentation but the documentation that is needed depends on your current status.

• Veterans - DD Form 214

• Current or Former Activated National Guard - DD Form 214

• Active Duty - Statement of service

• Discharged National Guard - NGB Form 22 (Report of Separation and Record of Service) and NGB Form 23 (Retirement Points Accounting and proof of the character of service)

• Discharged Reserves - Annual retirement points statement

For spouses to be able to utilize their VA home loan benefits, they’ll also need a COE to verify eligibility.

If a surviving spouse is receiving Dependency and Indemnity Compensation benefits they must complete the VA Form 26-1817. A copy of the Veteran’s separation paperwork is also required (i.e. DD Form 214).

If a surviving spouse is not receiving Dependency and Indemnity benefits, they’ll need to print and submit the VA form 21P-534EZ to their state’s VA Pension Management Center.

VA Loan Eligibility Requirements: Credit, Debt-To-Income, Property Type, and Loan Limits

In addition to having your COE, there are other requirements that need to be met in order to qualify for a VA loan.

Credit

Although the VA does not require a minimum credit score, each lender will have their own minimum standards for credit scores that they’ll allow. Some lenders may write VA loans for borrowers with FICO scores in the high 500s, but typically you'll need a credit score in the low-to-mid 600s to get a VA loan.

Debt-To-Income

The VA does not have a specific Debt-To-Income (DTI) ratio they use when determining borrower eligibility, the VA recommends that lenders use a maximum DTI ratio of 41 percent when they evaluate your ability to repay the loan. In some circumstances, it's possible to have a higher DTI and still obtain a VA loan.

Property Type

VA loans are available for single-family homes, approved condominium projects, manufactured homes on permanent foundations that meet other conditions and modular homes. VA loans are made to borrowers who certify that they personally intend to occupy the property, and homes that are financed by VA loans must have working heating and cooling systems, clean continuous water supply, sufficient roofing, and provide adequate living space.

VA Loan Limits

Loan limits for VA-backed mortgage loans are exactly the same as those for conforming conventional loans. These are set each year by the Federal Housing Finance Agency, and vary by area. In high-cost housing areas, jumbo loan amounts are available up to one-and-a-half times the normal conforming loan limit. You can see a map by county of the current year VA loan limits at the FHFA’s website.

Refinancing a VA Loan

If you already have a loan backed by the U.S. Department of Veterans Affairs, the VA has a streamline refinance home loan program for you called the Interest Rate Reduction Refinance Loan (or “IRRRL”), this unique-to-VA loan process simplifies qualifying: IRRRL requires no cash at closing, no review of your credit history if you are current on your existing VA loan over the past year, the property doesn’t need to be appraised and there’s no need to document your current income.

Simplified underwriting allows you to refinance an existing fixed-rate or adjustable-rate VA loan into a new fixed-rate VA loan. Closing costs and lender fees can be financed into the loan amount, but you will need to pay the VA funding fee. The VA also allows for a cash-out refinance, too, but not in a streamlined IRRRL process.