What is a VA Certificate of Eligibility?

What is a VA Certificate of Eligibility, sometimes referred to as a COE? My name is Evan Kaufman, your VA loan originator here to help explain.

The VA Certificate of Eligibility, or COE, is the document that helps lenders know that you are approved or eligible to utilize a VA loan.

And there’s a difference between eligibility and qualification.

Qualification means you make enough money to get a VA loan, and eligibility means that you are able to utilize the VA loan.

The Certificate of Eligibility is literally that.

It’s a certificate of your eligibility to utilize a VA loan.

In that document, it’s got a graph with a grid with some numbers all over it and words that don’t make a whole lot of sense. Now, you yourself can go out and pull that, and sometimes you might have a lender that’s asking you, ‘Hey, can you send me your VA Certificate of Eligibility?’

Well, if you’re working with folks who do a lot of VA loans – we do a lot of them, we know there’s a lot of other good lenders that do as well – we have portal access directly and can pull that certificate of eligibility for you. And at no charge.

If anyone’s trying to charge you to pull Certificate of Eligibility, run away.

That’s not something that should be a part of it at all. That’s something that can be pulled for free, especially for folks who get it.

Now, the deal is, a Certificate of Eligibility we’ll pull that and that shows us, hey, are you eligible to use it?

We are able to find out if you’re going to pay the VA funding fee. We have some other videos that talk what that is.

It’s a charge paid by the VA for the whole program. It tells us if you’re going to pay for that or not.

It’s going to show us if you have any other outstanding VA loans, other active VA loans, maybe if you own another home in another state that was under a VA loan. It’s going to show us on that.

It’s going to give us the numbers that we need to calculate your total entitlement, that’s essentially being able to say, hey, how much of a loan can I do up to 0% down?

If you have no active VA loans – cool thing is, no active VA loans out there, I mean, even if you owned one but then sold it and you have no active ones – there is no loan limit, so long as you qualify for the payments to do 0% down.

You can do a $1 million, $2 million, $3 million home, 0% down, if you have no active VA loans and you qualify for the loan and you have the money to make the payments. Pretty incredible.

But if you have an active VA loan, that COE gives us the information we need to calculate what your 0% down limits are for your next home as well.

On there, it tells us if it’s your first use, or what’s called subsequent use. Meaning every use after your first use of the VA loan, which impacts your VA funding fee.

And then it also tells us if you happen to be receiving VA disability compensation and then what that amount is, so we can factor that into your income correctly.

Pretty powerful document. Typically one page, sometimes two, and it gives us a lot of good information that we can use to help you not only know if we’re eligible for your VA loan, but we use it to also help qualify on the payment side.

So, that difference between eligibility and qualification, we got some good talks on that as well on YouTube here.

But the deal is – qualification is now the mortgage side – where we, as your lender, are looking at saying hey, do you have enough income? What do your debts look like? And are you going to qualify to make this payment?

COE tells if you’re eligible, gives us sometimes a little bit of information then too to help us make sure you qualify.

Very important document, VA Certificate of Eligibility. Make sure that it is reviewed at all costs before you start putting offers in on a home as well.

That’s something that we sometimes see – that I’ve seen as deal breakers in the past when I was a real estate agent, actively selling.

If a lender didn’t pull a COE, that could blow the whole deal up at the end.

Now, as a lender, we make sure that we pull that one every time when we’re going through your pre-approval process.

You want to make sure that you’re clear on your VA Certificate of Eligibility.

My name is Evan Kaufman. Hopefully, this helps explain exactly what the certificate eligibility is and go out there and win a home with the VA loan. Take care.