VA home loans require the borrower to apply for a VA certificate of eligibility–the official document from the Department of Veterans Affairs stating the borrower has served enough time in the military to qualify for their VA home loan benefits. In the case of retired or separated military members, eligibility is conditional on the type of discharge received–generally the borrower must have retired or separated under conditions described by the VA as “not dishonorable”.
For current military members, the VA requires proof of active or Guard/Reserve status including the length of the current commitment and time already served.
Borrowers can apply for a VA certificate of eligibility any time they want, provided they meet the time in service requirements. But when can a lender start processing VA loan paperwork for a first time VA borrower? The VA lender’s rulebook has plenty to say on the subject:
“Before processing and closing a loan for an applicant, the lender must ensure the applicant is an eligible veteran. Lenders should never close a loan before they establish eligibility, since VA cannot guarantee a loan for an ineligible veteran.”
This means that veterans can’t ask the borrower to start processing VA mortgage loan paperwork “in good faith” while the veteran waits for his or her certificate of eligibility by showing copies of military orders, a military ID card or any other generally acceptable proof of military service. The VA regulations are clear, the certificate of eligibility is the only acceptable proof the lender may use.
There’s only one exception. In cases where the borrower wants to apply for a VA Interest Rate Reduction Refinancing Loan, the lender only needs the borrower’s Social Security number in most cases. The lender matches the borrower’s Social and his or her last name and is usually able to access information on the prior loan. Only in cases where the prior loan data can’t be reached online does the VA require further proof to get the VA loan process started when it comes to VA IRRRLs.
The short answer to the question, “When can I apply for a VA loan” is that the borrower can complete paperwork anytime he or she feels ready to do so, but the lender cannot do anything with that paperwork until the VA certificate of eligibility is received from the Department of Veterans Affairs.
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