VA loans are exclusively designed for service members and their families and come with unique qualifications and requirements to obtain them. Requirements for VA loan eligibility are pretty straightforward. Here’s what you should know about VA home loan eligibility and who qualifies for a VA loan.
VA Loan Service Requirements
All mortgage loans have some sort of mandatory qualifications, and the same is true for VA loans. However, unlike conventional loans, there is no down payment requirement for a VA loan.
VA loans have time-in-service requirements for Veterans and those actively serving.
Service requirements can vary based on when you served, but typically include:
- Honorable discharge for Veterans
- 90 consecutive days of active service during wartime
- 181 days of active service during peacetime
- Six years of service in the Reserves or National Guard
- Spouse of a service member who died in the line of duty or as a result of a service-connected disability
There are other VA loan eligibility scenarios, but these are the most common guidelines.
How to Verify VA Loan Eligibility
The only way to verify your VA loan eligibility is through a Certificate of Eligibility (COE), which you’ll need to apply for with the VA. Your COE is what confirms to lenders that you are eligible for a VA loan, and what your benefits are. Without this document, you cannot obtain a VA loan.
You can apply for your COE through the VA or through your preferred lender.
You can start the homebuying process before you obtain your COE. However, you will need it before you close on your loan.
How to Get Your COE
To get your COE, you may need to provide proof of your eligibility to the VA in the following ways.
- Veterans: You may need a copy of your discharge or separation papers to prove your eligibility.
- Service members: You’ll need a statement of service signed by your commander, adjutant, or personnel officer that shows:
- Your full name
- Your Social Security number
- Your date of birth
- The date you entered duty
- The duration of any lost time
- The name of the command providing the information
- Current or former activated National Guard or Reserve members: You may need a points statement and a copy of your discharge paperwork.
- Other service members or spouses who qualify: Requirements vary.
Who is Eligible for the VA Loan?
VA loans are almost exclusively available to Veterans, active duty service members, and qualified surviving spouses. There are some government employees and select others who may be eligible.
Is the National Guard Eligible for a VA Loan?
Yes, members of the National Guard are typically eligible for VA loans, but only if they meet the requirements set by the VA.
National Guard members and reservists may be eligible for VA home loans if they've completed at least six years of service and fulfilled the following requirements:
- Honorable discharge
- Placement on the retired list
- Transfer to Standby Reserve or Ready Reserve following honorable service
- Continue to serve in the Selected Reserve
- Were Title 10 service for at least 90 days
- Were Title 32 service under sections 316, 502, 503, 504, and 505 for at least 90 days with at least one period of service lasting more than 30 days
Are Spouses Eligible for the VA Loan?
Yes, certain military spouses can be deemed eligible for VA loan benefits, but only under certain circumstances:
- Being the spouse (not remarried) of a Veteran who died while in service
- Being the spouse (not remarried) of a Veteran who died from a service-connected disability
- Being the spouse of a service member missing in action for at least 90 days or a prisoner of war for at least 90 days
The VA doesn't have borrower requirements, but it's important to pay attention to lender-specific requirements, which can vary significantly from one lender to the next.
For example, the VA doesn’t set a minimum credit requirement, but lenders can. That’s why it’s important to shop around for lenders and find out what the minimum credit requirements are before applying for loans.
You’ll also likely need to have a certain amount of income left over every month after paying all major expenses like medical care, food, and transportation to qualify for your loan. What’s leftover is called residual income, and VA underwriters use loan analysis form 26-6393 to compute it. Residual income is a factor unique to VA loans — conventional lenders don’t use it — but it will be taken into account when you apply for this type of loan.
VA loans also take into account your debt-to-income ratio, just like conventional loans do. That said, there is no maximum debt-to-income ratio, or DTI, to meet with a VA loan, which can make it easier to qualify with higher amounts of debt and a lower income.
DTI ratio limits will vary by lender and other factors. Veterans with a DTI ratio greater than 41% must meet a higher benchmark for residual income.
Check Your VA Loan Eligibility
Veterans have many options when it comes to home loans, but one of the best options is a VA loan. These loans offer flexible credit requirements, the option for no down payment, and other benefits, which can make it easier to buy a home. If you want to use this type of loan, though, you'll have to meet the eligibility requirements set by the VA.
Ready to start your home loan search? Paddio can help you find the right mortgage loan for your unique needs.