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How to get a home loan

Jim Quist is the president and founder of NewCastle Home Loans. He has 20+ years of mortgage lending experience as a business owner, mortgage underwriter, and loan officer. Jim's goal is to help people buy homes.

Jim Quist is the president and founder of NewCastle Home Loans. He has 20+ years of mortgage lending experience as a business owner, mortgage underwriter, and loan officer. Jim's goal is to help people buy homes.

How to make sense of the VA Certificate of Eligibility (COE)

In this article, I’ll show you how to quickly read and understand the Certificate of Eligibility (COE).

This information will make it easy for you to see if you’re eligible for a VA Loan so that you can buy a home with no down payment.

How to read the Certificate of Eligibility.

Our customer Mason planned to use a VA Loan to buy a home in January. Using his COE as an example, I’ll explain five items that affect your eligibility. They are:

I numbered the items 1-5 on a copy of Mason’s COE. Below it I explain each.


Mason’s Certificate of Eligibility

VA Certificate of Eligibility Example


1. VA Entitlement Codes

You must fulfill the VA’s service requirements to be eligible for a VA Loan

The entitlement code affirms your military service. Match the code on your COE to the service period on the chart below.

Then go to the VA’s website for details about your service era and make sure you meet the service eligibility requirements.

Here are the eleven entitlement codes and their matching service periods.

VA Entitlement Codes

Mason’s VA entitlement code is 10 - Gulf War. He fulfills the service time requirements because he was on active duty during wartime for 24 consecutive months.


2. VA Funding Fee

Most veterans pay a one-time funding fee to get a VA Loan. The VA funding fee is a closing cost that goes to the Department of Veterans Affairs.

The VA uses the money they collect from funding fees to pay for loans that default and to keep the VA loan program healthy for future veteran home buyers.

Some veterans are eligible for a funding fee exemption. Mason is non-exempt. He must pay the funding fee.


3. Prior VA Loans Charged to Entitlement

Check section 3 on your COE if you plan to use an additional VA loan to buy another home. Section 3 is where the VA tracks your entitlement charged. Entitlement charged is the amount of entitlement in use on existing VA loans.

If you know how much VA entitlement you’re using, then you can quickly figure out how much entitlements you have remaining for your next VA Loan.

Mason took out a $300,000 VA loan on July 12, 2016. His loan is still active, and he is using $75,000 of his VA entitlement.


4. VA Entitlement Amount

Section 4 is where you figure out if you have enough entitlement for a zero down VA Loan.

Before we calculate Mason’s entitlement, let me explain what the VA means by, “This veteran’s basic entitlement is $0*. Total entitlement charged to previous VA Loans is $36,000*.”

VA COE Entitlement

Mason’s entitlement is not $0* and he didn’t charge $36,000* of his entitlement to previous VA Loans. Notice the asterisks next to the $0* and the $36,000*. That’s the VA’s way of hinting that Mason might have more entitlement available.


How to calculate your Entitlement.

To figure out how much entitlement is available, follow the VA’s instructions that I highlighted on the COE. “...the entitlement amount is 25% of the VA loan limit for the county where the property is located.”

The national VA loan limit for 2019 is $484,350. So multiply $484,350 by 25% to get your entitlement amount of $121,087.

VA Entitlement

Mason already used $75,000 of his $121,087 entitlement. To figure out how much he has left over for his next home purchase, subtract $75,000 from $121,087 to get $46,087.

VA Entitlement Available

For a thorough explanation and examples of VA entitlement, see How to use VA entitlement for one or more VA Loan.


5. Conditions on the COE

The VA adds conditions to section 5 of the COE to spell out particular eligibility requirements.

Subsequent Use Funding Fee

One of Mason’s conditions is “subsequent use funding fee.” This condition tells the lender that Mason must pay a higher funding fee because this is his second VA Loan.

You pay a slightly higher funding fee for every loan after the first one. Veterans who are exempt never pay a funding fee.


Restoration of Entitlement of the COE.

Our customer Michelle bought her home with a VA Loan in December. I included a copy of her COE to point out one more item that could limit your eligibility. The VA calls it “restoration of entitlement.”

Take a look at a copy of Michelle’s COE. I numbered three items 6-8. Below the COE I’ll explain each.

  • 6. Entitlement Code 05
  • 7. VA Funding Fee Exempt
  • 8. One Time Restoration of Entitlement


Michelle’s Certificate of Eligibility

COE Entitlement Code 05


6. Basic Restoration of Entitlement - Code 05

Michelle’s entitlement code is 05 - Entitlement Restored. Entitlement Restored means she already used her entitlement for a VA Loan, paid off the loan, and asked the VA to restore her entitlement.

You can reuse your VA entitlement indefinitely and buy as many homes as you want using VA mortgages. However, you must pay off the VA loans, sell the properties, and ask the VA to restore your entitlement before you can reuse it.  

If you don't, then you will eventually use up all your entitlement leaving you ineligible for a future VA loan unless you come up with a substantial down payment. 

If you plan to use more than one VA Loan, don’t let a code 05 limit your eligibility. Borrow a little strategy and know-how from a VA Loan Expert. Contact me for free advice.


7. VA Funding Fee Exemption

Michelle is exempt. She didn’t pay a funding fee for her VA Loan.

Veterans who receive compensation, retirement, or active duty pay from the VA for a service-connected disability don’t pay the fee. A surviving spouse of a veteran who died in service or from a service-connected disability is also exempt.


8. Special One Time Restoration of Entitlement

Michelle had a VA Loan, paid it off, and asked the VA to restore her entitlement - before she sold the house.

The VA restored her full entitlement as she requested. She used her restored entitlement for additional VA Loan that  to buy an another property.

The VA will grant a veteran a special one-time restoration of entitlement only once. Afterward, they add the “one-time restoration” condition you see on Michelle's COE. It reads, “Any future restoration requires disposal of all property obtained with a VA loan.”  

Michelle must sell both her properties and give proof to the VA before she asks for the basic restoration of her entitlement as I outlined in # 6 above.

COE One Time Restoration


Confirm you're eligible for a VA Loan.

The easiest way to get a copy of your COE is to ask your lender to do it for you. Most lenders have access to the VA’s online system. They can get your COE in a couple of minutes. You can call me for help at 855-610-1112.

If you prefer to do it yourself, the VA tells you How to Apply for a VA Home Loan Certificate of Eligibility (COE). Alternatively, call the VA’s eBenefits Help Desk at 1-800-983-0937, Monday-Friday, 8 am to 8 pm EST.



In this article, I used two Certificates of Eligibility from our customers to show you five items that affect your eligibility for a VA Loan. We covered:

  • 1. Entitlement codes, including Code 5 for Entitlement Restored.
  • 2. The VA funding fee for exempt and non-exempt veterans.
  • 3. How entitlement you used for prior VA loans affects your eligibility for future VA loan.
  • 4. How to calculate full entitlement and remaining entitlement if you have an active VA Loan.
  • 5. Conditions that show up on the COE, including the subsequent use funding fee and the special one-time restoration of entitlement conditions.

You must be both eligible and qualified to get a VA Loan. The Department of Veterans Affairs decides if you’re eligible and your lender decides if you qualify.

Contact NewCastle Home Loans and work with one of our VA Loan Experts. We will get a copy of your Certificate of Eligibility from the VA. After we affirm that you meet the VA’s eligible requirements, we will qualify you and then pre-approve your VA Loan.

Ready to start? Get pre-approved for your VA Loan now. Or make sure to try out our online VA Loan Calculator. It's tied to today's live rates and shows you all the payment and fee details right there.

In addition, we recently published "The Complete Guide to VA Loans," which you can download for absolutely free! It will walk you through all the details about how documentation, benefits, getting approved, and closing on your VA Loan.

Search VA Loan Rates!

Learn more about VA Home Loans

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