How Your Military Discharge Can Affect VA Home Loan Eligibility
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As with most military benefits, the nature of your discharge can affect your eligibility for a VA home loan. While discharge type isn’t an issue for most veterans, some individuals may need a more formal review before moving forward.
Proof of Service
The most common way to prove military service is with the DD Form 214, the Certificate of Release or Discharge from Active Duty.
With this key documentation, the VA is usually able to determine whether you’re eligible. Veterans of the Reserves and National Guard will typically supply an annual retirement points summary. Active military members will need to submit a statement of service.
Veterans and service members who meet eligibility guidelines will be issued a Certificate of Eligibility from the VA. While you don’t need it in hand to start the homebuying process, lenders will need a copy of your COE before you can close on a VA loan.
Veterans can try to get their COE online using the VA’s eBenefits portal. A mortgage lender may also be able to obtain it for you instantly through a special VA system.
Seeking Help
VA officials will review your military records, along with any supporting documentation you submit. They’ll also consider things like your service history, performance and the nature of the infraction(s).
It’s also important to remember that being eligible for a VA home loan and actually being able to obtain one represent two different things.
Veterans with VA loan entitlement will need to meet credit, financial and other requirements set by both the VA loan program and their specific lender.
Chris Birk is the author of “The Book on VA Loans: An Essential Guide to Maximizing Your Home Loan Benefits.”
An award-winning former journalist, Chris writes about mortgages and homebuying for a host of sites and publications. His analysis and articles have appeared at The New York Times, the Wall Street Journal, USA Today, ABC News, CBS News, Military and more.
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Your Certificate of Eligibility (COE) verifies you meet the military service requirements for a VA loan. However, not everyone knows there are multiple ways to obtain your COE – some easier than others.
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† #1 VA Purchase Lender: Veterans United Home Loans provided more VA Purchase Loans by volume than any other lender in FY 2016, 2017, 2018, 2019, and 2020. Source: Department of Veterans Affairs Lender Statistics
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All rate availability will depend upon an individual’s credit score and details of the loan transaction. First-time homebuyers may not qualify for a jumbo product. The interest rates quoted here are subject to change at any time and cannot be guaranteed until locked in by your Loan Officer.
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All rates assume a single-family primary residence not including manufactured homes, 720 credit score, with applicable charges and fees (including the VA Funding Fee) included, 181 days of eligible active regular (non-reserves) military service with no service-related disabilities or previous use of a VA Loan.
Current advertised rates: 2.875% (3.465% APR) with 0.875 discount points on a 45-day lock period for a 15-Year Fixed VA Loan, and 3.375% (3.695% APR) with 0.750 discount points on a 45-day lock period for a 30-Year Fixed VA Loan. These loan rates assume no down payment and a $250,000 loan amount.
Current advertised rates: 3.250% (3.502% APR) with 0.250 discount points on a 60-day lock period for a 15-Year Streamline (IRRRL), and 3.500% (3.690% APR) with 0.875 discount points on a 60-day lock period for a 30-Year Streamline (IRRRL). These Refinance loan rates assume that the property will be owner-occupied.
Current advertised rates: 3.250% (3.758% APR) with 0.250 discount points on a 60-day lock period for a 15-Year VA Cash-Out refinance, and 3.500% (3.822% APR) with 0.750 discount points on a 60-day lock period for a 30-Year VA Cash Out refinance. These Refinance loan rates assume a loan-to-value ratio lower than 90%.
Current advertised rates: 3.500% (3.862% APR) with 1.250 discount points on a 45-day lock period for a 30-Year Fixed VA Jumbo, 3.750% (3.953% APR) with 1.000 discount point on a 60-day lock period for a 30-Year Streamline (IRRRL) Jumbo, and 3.750% (4.097% APR) and 1.000 discount point on a 60-day lock period for a 30-Year VA Cash-Out Jumbo. These loan rates also assume a loan amount in excess of the current conforming loan limits. Although the conforming loan limit varies depending upon where you live, for most of the United States in 2021, that means your loan must be greater than $548,250 to qualify as jumbo. Alaska, California and Hawaii loans have special considerations for what qualifies as jumbo and may be priced separately.
