The VA Loan Certificate of Eligibility is a very confusing form for Veterans. As a Mortgage Originator Specializing in VA Loans I have to be honest in telling you that many lenders are even confused about this form. What is it? What does it mean? How do you read it? How do you get it? All of which are very real and valid questions when discussing such a form.
First let us start with the basics. The VA Loan Certificate of Eligibility is simply a form provided by the Department of Veterans Affairs to lender which states that you (the Veteran) are eligible for the VA Loan. It does however say that the Veteran is prequalified for the VA Loan. Keep in mind when seeking a VA Loan the Veteran must be prequalified in addition to obtaining the form.
Next let us take a look how to read it. On the VA Loan Certificate of Eligibility you will see the following verbiage. “This Veterans Basic Entitlement is $36,000.” Do not be alarmed. This does not mean that you can only get a VA Loan for $36,000 – all that means is that the VA guarantee’s the loan up to $36,000 for a loan up to $144,000. Now, there is something else called Bonus Entitlement – this amount is $68,250.
For loans above $144,000 this will kick in. If you take a look at both of these numbers you will notice that the total of the two is $104,250 which happens to be twenty-five percent of $417,000 which is typically the maximum loan amount a Veteran can obtain with no money down.
Remember Veterans that VA does not lend the money – they simply on insure the loan. Keep in mind you can have one of these forms and not be prequalified for a VA Loan (which is why it’s so important to consult with a VA Loan Specialist up-front).
For more information regarding your VA Loan Certificate or to obtain a copy feel free to roger up with us direct at [email protected]
Thank you and may God bless you for your service to our great country!