VA Entitlement Codes on the Certificate of Eligibility
The first step a California Veteran will need to complete in securing a VA loan is to obtain your Certificate of Eligibility. The Certificate of Eligibility, also known as the the COE, is a document that the Veterans Adminstration issues, which verifies your eligibility for VA financing. On the COE there is a number listed that is known as the Entitlement Code. The Entitlement Code shows during what period you earned your eligibility, or other alternative ways in which you became eligible for the VA mortgage program. The chart below shows the entitlement codes and what methods of eligibility they represent.
Subsequent Use of VA Eligibility
A common Entitlement Code is “05”. This means that the Veteran has used VA financing previously and signifies to the lender that a subsequent use VA Funding Fee will be required, unless the COE also verifies the Funding Fee is waived (in the case of a service connected disability).
These periods and methods of eligibility have certain minimum service periods that are required to establish your eligibility for the VA loan program. Each time period has different service requirements. This next chart lists out the dates that define each time period of service as well as their minimum service requirement for those periods.
Easiest Method for Obtaining your Certificate of Eligibility
While it is possible for a Veteran to retrieve their Certificate of Eligibility directly from the VA, the easiest way to retrieve the COE is through a VA approved mortgage lender. VA approved lenders have direct access to pull COE’s and in many cases can retrieve your COE within seconds of inputting the information into the VA portal. It seems that 50% of the time the DD214 will need to be uploaded, and depending various circumstances, it can take a few days to retrieve the COE. It so easy for a lender to retrieve your COE that contacting a local VA lender should be your first step in the loan process.
Authored by Tim Storm, a California Loan Officer specializing in VA Loans. MLO 223456. – Please contact my office at the Home Point Financial. My direct line is 949-640-3102. www.CaliforniaVALoanExpert.com. I will prepare custom VA loan scenarios which will be matched up to your financial goals, both long and short term. I also prepare a Video Explanation of the your scenarios so that you are able to fully understand the numbers BEFORE you have started the loan process.
With a Chapter 7 bankruptcy, which seizes and liquidates assets to repay debts, a potential borrower has to wait 2 years before being able to qualify for a VA loan. The clock on the 2 year waiting period starts once the bankruptcy is discharged, not when bankruptcy is filed. With Chapter 13 bankruptcy, which is a debt restructuring plan that is mandated by the court, a borrower may be eligible for a loan just 12 months after their bankruptcy filing date. In this case, good credit and no late payments are critical to being able to qualify. A potential borrower will also need to get permission to take on additional monthly payments from the bankruptcy trustee. The VA program can even be used to payoff a Chapter 13.