How do I Calculate the Loan Amount From the VA Eligibility Certificate?

by Brett Johnson ; Updated July 27, 2017
Purchase a home using your Veteran's Entitlement.

Veterans discharged under conditions other than dishonorable and active veteran receive entitlement for their military services performed. Full entitlement is determined by a veteran’s years and location of military service. The Veterans Administration (VA) will guarantee the lesser of 25 percent of the county loan limit or 25 percent of the loan amount for veteran with full entitlement. Lenders and financial institutions can request the Certificate of Eligibility for a Home Loan from the VA to determine the loan amount qualification. A Certificate of Release or Discharge from Active Duty (DD Form 214) is provided as proof of service and used to request a veteran’s level of entitlement.

Step 1

Request your Certificate of Eligibility (COE) from the Department of Veterans Affairs online or by mail. A mortgage lender can obtain your COE online using a system called WebLGY, depending on your level of eligibility. Complete and send VA Form 26-1880, Request for a Certificate of Eligibility for a Home Loan to the VA to receive the information by mail.

Step 2

Review the COE and locate the level of entitlement. This will indicate the loan amount that you are guaranteed for. The Veterans Administration (VA) will guarantee the lesser of 25 percent of the county loan limit or 25 percent of the loan amount for veteran with full entitlement.

Step 3

Analyze the COE to determine the level of entitlement. The COE will indicate the percent of loan guaranty available based on the veteran’s level of entitlement achieved.

Step 4

Calculate the loan amount for a veteran eligible for full entitlement.

Example: Veteran has full entitlement. Purchasing a home for $250,000 located where the county loan limit is $417,000.

$417,000 X 25% = $104,250 Available entitlement $250,000 X 25% = $62,500 Lender required guaranty and/or down payment combination

The VA guarantee of $62,500 allows the veteran to purchase with no money down. The guarantee amount available exceeds the required loan guarantee coverage required by the lender.

Tips

  • Obtain your certificate of eligibility before applying for a loan.

About the Author

Brett Johnson began writing professionally in 2006. His work includes "The Buyer's Guide to Home Ownership" and training manuals for mortgage banking institutions. Johnson holds an Associate of Arts in business administration from Merritt College-Oakland.

Photo Credits

  • Blank award certificate form image by Stasys Eidiejus from Fotolia.com