Behind the Scenes of a VA Loan

VA guaranteed financing often offers veterans less stringent qualifying guidelines, 100% financing or refinancing, no PMI, and competitive interest rates.

Military service can qualify an individual and he or she need not have retired from active duty in order to be eligible.

Eligibility for a separated veteran is broken down in this handy chart:  Eligibility Requirements for a VA Loan. It depends on three primary factors:

1.)   Length of active service
2.)   Time period of active service
3.)   The character of their service

Character of service is found in Item 24 of the DD-214.  It MUST be a discharge classified as honorable. Functionally, this means that it needs to say “Honorable” or in some cases “General”. Check with your Loan Advisor, but unless it’s a rare case, anything else is going to be a no-go.

Reserve & National Guard:
Many Reserve and National Guard members qualify for VA financing, but the approval process may be more involved. Generally, a Reservist or Guardsman must have served six years unless still serving. Many Reserve or Guard members meet the qualification as “Active” veterans because of the length of time their respective specialty training takes or due to being activated for deployment. While every active duty service member will be given a DD-214 upon their separation from active duty, the Reserve components do not have a similar standard form.  A Reservist who completes their enlistment or commission without retiring will have a document stating their effective date of separation and character of service; however the form of that document will vary based on their branch of service.

Certificate of Eligibility:
There are a couple of valuable resources that can help in speeding the process of getting the Certificate of Eligibility for a veteran.

1. Outside of the automated request system available to mortgage lenders, the most helpful—and the quickest—route for obtaining a CoE is by accessing the Veterans Administration eBenefits Portal.The National Personnel Records Center (NPRC) has undertaken the responsibility of scanning all personnel records into an electronic database. So veterans who separated after June of 2000 should have records available to them online. Logging into the www.ebenefits.va.gov website provides access to information on veteran benefits and is tailored to each individual.  Gaining access to this site is invaluable. It allows most requests to be processed quickly and entirely online.  A Premium eBenefits Account delivers near instant access to personnel records including the Certificate of Eligibility (provided their records have been scanned/uploaded).
2. If electronic records are not available, the process is longer but not impossible.  The veteran will need to submit, by mail or fax, an SF-180 form to request military records. The NPRC will send required documents that can then be submitted to the VA requesting a CoE.This process can take several months, but will usually be completed in two weeks. Though it is rare for a file to need research or reconstruction, which extends response times, there is one situation to be aware of that will make it VERY difficult. In July of 1973 the NPRC headquarters in St. Louis had a massive fire that destroyed 16-18 million records. If your records were destroyed, work with your Loan Advisor and the NPRC to get the necessary paperwork.

Your VA loan entitlement is one of the most valuable benefits for which your service entitles you. Your Loan Advisor should always explore this option with you and will be capable of guiding you through the process step-by-step.