Change Date

September15, 2004, Change 4

1.·  This section has been changed to create subsection lettering.

2.·  Subsection b has been changed to add a hyperlink to ACE.

a. What is Eligibility?

Eligibility is the veteran’s entitlement to VA home loan benefits under the law, based on military service.  An eligible veteran must still meet credit and income standards in order to qualify for a VA-guaranteed loan.  A lender cannot make a VA-guaranteed loan to an ineligible applicant under any circumstances.

b. The Lender’s Role

Before processing a loan for an applicant, the lender must ensure VA has determined the applicant is an eligible veteran.  Each application must be evaluated by VA to see if the applicant meets criteria established by law. 

It is critical that a potential borrower’s eligibility be established early in the loan process.  This assures that a lender is working with an eligible party.  Delaying the application for eligibility can create the following problems:

3.·   Time and money may have been expended needlessly, if VA determines the veteran is not eligible.

4.·   The loan closing may be delayed pending a final determination, if the veteran’s eligibility determination is more complex than normal.

Once VA finds an applicant eligible, VA issues the veteran either

5.·   VA Form 26-8320, Certificate of Eligibility for Loan Guaranty Benefits, or

6.·   VA Form 26-8320a, Certificate of Eligibility for Loan Guaranty Benefits (Reserves/National Guard). 

A Certificate of Eligibility is the only reliable Proof of Eligibility for the Lender.

Once a Certificate of Eligibility (COE) is received

7.·   there is generally no need to have it updated before loan closing, and

8.·   contact VA if there is some question as to the accuracy of data on the COE.

9.