//VA Loan Eligibility: Credit Score, Loan Amount & Military Type

VA Loan Eligibility: Credit Score, Loan Amount & Military Type

Dealing with the VA and all of their processes can be frustrating, and that when you add finding a home, and getting the best mortgage to that list, things can get out of hand very fast. 

But here's the thing: 

Figuring out your VA loan eligibility doesn't have to be a complicated process and once you figure it out, all VA lenders will follow the same guidelines. 

In today's post I am going to go over what requirements you have to meet to become eligible for your VA loan. 

I will also discuss how to apply for your certificate of eligibility and the general steps you should take to apply for a Va Loan.

va loan eligibility

"Every American deserves the dream of home ownership.

HOW MUCH MORE SO do our VETS!!"

What Is A VA Home Loan

A VA Home Loan is merely a loan product created to give veterans the ability to purchase a home without the need for a down payment.

We love VA Loans because there isn’t anyone more deserving of this type of loan than the people that protect and fight for our country.

Even though these loans are guaranteed by the Department of Veterans Affairs, they are still generated through private lenders.

This means there are still specific requirements a Vet has to meet before they can qualify and be eligible for this type of loan.

Do VA Loans Require Mortgage Insurance

Since a VA loan is backed by the Department of Veterans Affairs, there isn’t any PMI required.

This is an excellent benefit because not only will you have no down payment, you will also not have the additional PMI attached to your monthly mortgage.

This means it will also be easier to financially qualify because you won’t need a higher income to meet Debt To Income ratios. 

Will A VA Loan Have Funding Fees

Even though the VA loan comes with loads of benefits, you still have to pay a one-time funding fee.

This funding fee will vary based on the amount of the down payment and your military category.

It is primarily used to offset the cost to taxpayers since there isn’t any PMI or down payment required.

For Example:

Someone in the Air Force who is applying for a VA loan for the first time without putting any money down would pay a different fee than someone else in the armed forces who put money down.

If they were a Reservist or National Guard, they would probably pay about a quarter of a percentage point more in funding fees.

You can give us a call at - to see what your rates would look like.

what is the Debt to income ratio

The debt-to-income ratio for a VA loan isn't set by the VA, they actually don't have a maximum ratio that you can't go above.

However if your debt to income ratio is over 41% it makes it harder for the lender to get you approved for a loan.

Benefits Of A VA Home Loan

  • No Down Payment Required
  • Higher Debt To Income Ratio Threshold 
  • Lower Interest Rate Than A Conventional Loan 
  • No mortgage insurance (PMI) required
  • Less Income Needed To Qualify Due to Lower Interest Rate

Eligibility Requirements For VA Home Loans

Service During Time Of War

  • World War II - Sep 16, 1940 - July 25, 1947
  • Korean War - June 27, 1950 - Jan 31, 1955
  • Vietnam War - Aug 5, 1964 - May 7, 1975

Service Requirements:

At least 90 days active duty with other than dishonorable discharge

Less than 90 days active duty if discharged for a service-connected disability


  • Gulf War - August 2, 1990 - The Gulf War period is still in effect

Service Requirements:

24 months continuous active-duty with other than dishonorable discharge.

At least 90 days or completed the full term that he or she was ordered to active duty with other than dishonorable discharge.

The Tactical VA Loan Blueprint

At least 90 days active duty, and discharged for hardship, early out, convenience of the Government, reduction in force, condition interfered with duty, or compensable service-connected disability.

Less than 90 days active duty if discharged for a service-connected disability

Service During Time Of Peace

  • All - July 26, 1947 - June 26, 1950 and February 1, 1955 - August 4, 1964
  • Enlisted - May 8, 1975 - September 7, 1980
  • Officers - May 8, 1975 - October 16, 1981 

Service Requirements:

At least 181 days continuous active duty, with other than dishonorable discharge.

Less than 181 days active duty, if discharged for a service-connected disability.

Separated from service 

  • Enlisted - After September 7, 1980 
  • Officers - After October 16, 1981

Service Requirements:

  • 24 months continuous active duty with other than dishonorable discharge.

  • At least 181 days or completed the full term that he or she was ordered to active duty with other than dishonorable discharge.

  • At least 181 days active duty and discharged for hardship, early out, convenience of the Government, reduction in force, condition interfered with duty or compensable service-connected disability

  • Less than 181 days active duty, if discharged for a service-connected disability

Active duty service personnel

If you are now on active duty, eligibility can be established after 90 days of continuous active duty.

Upon discharge or release from active duty, eligibility must be reestablished.

National Guard or Selected Reserve

If you are not otherwise eligible and you have completed a total of six credible years in the Selected Reserve or National Guard (member of an active unit, attended required weekend drills and two-week active duty for training) and one of the following:

  • Placed on the retired list 
  • Were discharged with an honorable discharge
  • Continue to serve in the Selected Reserve
  • Were transferred to the Standby Reserve or an element of the Ready Reserve other than the Selected Reserve after service characterized as honorable service

Spouse Eligibility

You may also be determined eligible if:

  • You are an un-remarried spouse of a Veteran who died while in service or from a service-connected disability.
  • You are a spouse of a Service member missing in action or a prisoner of war
  • You are a surviving spouse in receipt of Dependency and Indemnity Compensation (DIC) benefits in cases where the Veteran's death was not service-connected
  • Note:
  • A surviving spouse who remarries on or after age 57 and on or after December 16, 2003, may be eligible for the home loan benefit.  

  • However, a surviving spouse who remarried before December 16, 2003, and on or after age 57, must have applied no later than December 15, 2004, to establish eligibility.

How To Apply For A VA Loan Certificate Of Eligibility (COE)

Obtaining your Certificate Of Eligibility (COE) is the first step that you need to take before you start looking for a home. 

The COE confirms to the lender that you are eligible for a VA-backed loan.

Below we review the documentation you will need in order to verify your eligibility for a VA home loan, how to submit the paperwork, and how to obtain the COE.

Documentation Needed

The documents you will need are going to depend on the type of your eligibility.

Below we go over what you will need: 

  • Veteran 
  • Current or Former National Guard 
  • Reserve Member Who's In Federal Active Service
  • DD Form 214 - required to have a copy showing the character of service (item 24) and the narrative reason for separation (item 28).

    Active Duty Service  Member

    A current statement of service signed by (or by the direction of): the adjutant, personnel office, or commander of the unit or higher headquarters showing: 

    • Your full name 
    • Social Security Number
    • Date of birth
    • Entry date on active duty
    • The duration of any lost time
    • The name of the command providing the information

    Current National Guard or Reserve member who has never been in Federal active service

    A statement of service signed by (or by the direction of): the adjutant, personnel office, or commander of the unit or higher headquarters showing: 

    • Your full name 
    • Social Security Number
    • Date of birth
    • Entry date on active duty
    • The duration of any lost time
    • The name of the command providing the information

    A Discharged member of the National Guard who has never been activated for Federal active service

    NGB Form 22, Report of Separation and Record of Service, for each period of National Guard service

    &

    NGB Form 23, Retirement Points Accounting, and proof of the character of service

    Discharged member of the Selected Reserve who has never been activated for Federal active service

    Copy of your latest annual retirement points statement and evidence of honorable service

    Applying For Your Certificate Of Eligibility

    Now that we have obtained all the information needed to apply for our COE, below are the steps you can take to apply.

    Apply online

    To apply for your COE you will need to go through the eBenefits website.

    Apply through your lender

    A majority of lenders have access to the Veterans information Portal.

    It is essentially an online application that can confirm your eligibility and issue a COE all online and almost instantly.

    Military Can Achieve The Dream of Home Ownership with VA Loan

    The ability for this system to work usually will depend on how much information the VA already has on record for you. 

    VA loan limits For 2019

    The maximum VA loan guaranty limits the value of a home that can be purchased with no down payment.

    In 2019, if you are a qualified borrower, you can generally buy a home with a value of up to $484,350 with no down payment, though the actual amount varies by county.

    One thing most lenders don't mention is that you can actually use up to that full amount benefit.

    For Example:

    You purchase your first home for $240,000, this leaves a remaining $244,350 left in house that you can purchase.

    This is a little known fact, but it is very effective if you are trying to purchase a second home. 

    These guidelines mirror the single-family conforming loan limits established by the Federal Housing Finance Agency.

    Specific areas with higher-value properties have higher limits — and there are even higher value ceilings for Alaska, Hawaii, Guam and the U.S. Virgin Islands.

    Credit Score Needed To Qualify For A VA Loan

    The VA Loan does not have a minimum credit score requirement. 

    However, since private lenders are the ones taking the loans out, they have a  minimum credit score for a VA loan.

    The minimum score is going to be around a 580, but if you really want to increase your chances of getting the a better rate, you probably want to be at least at a 620.

    Fico score

    APR

    Mo. Payment

    760 - 850

    4.522 %

    $1,270.00

    700 - 759

    4.744 %

    $1,303.00

    680 - 699

    4.921 %

    $1,330.00

    660 - 679

    5.135 %

    $1,363.00

    640 - 659

    5.565 %

    $1,430.00

    620 - 639

    6.111 %

    $1,517.00

    As you can see, the higher you go up in your credit score the lower your APR is going to be.

    This in turn lowers your monthly payment and also will decrease your debt to income ratio requirement because your mortgage payment will be lower.

    I suggest putting a credit freeze on all of your reports once you have received a pre-approval for your loan because you don't want anything affecting your score.

    Not even yourself.

    Take Action! 

    If you’re a current or retired military member looking to buy a home and choose to take advantage of the VA Loan program, you may be wondering the best mortgage company to go with. 

    Be very careful here as any mortgage company can offer a VA loan, but few of them specialize in VA loans, and there are a lot of ways lenders can screw up your dream of owning a home. 

    The Wendy Thompson Lending Team is one of the top ranked VA Loan and Mortgage specialist working with active military and veterans in all of the 50 States. 

    Deciding on the right VA lender is the most important decision you will make. Choosing the wrong lender can result in you losing your dream home or costing you hundreds of thousands of dollars in more interest over the life of your mortgage.  

    Don’t make that mistake, contact the Wendy Thompson Lending Team today!  

    You can start the process by clicking the yellow 'See if I'm Eligible' button on the right side bar under the 'Start your quote for VA Home Loan'  or call Wendy’s Team directly at (901) 250-2294, to get started on living the American Dream in the home of your Dreams! 

    2019-01-30T21:22:32+00:00By |VA|Comments Off on VA Loan Eligibility: Credit Score, Loan Amount & Military Type

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