It’s pretty well known to those who have used their VA home loan benefit to buy a home—you absolutely must have your certificate of eligibility before you can get any sort of loan approval. VA lenders use this certificate exclusively when validating the veteran is indeed entitled to the loan. A properly approved VA loan including the certificate of eligibility ensures the loan receives the VA backed guarantee.
Veterans can get this certificate, obtained directly from the VA, by visiting a regional VA center, by writing a request or going online and completing the VA form 26-1880. Of course, the easiest way is to have the lender order the certificate on behalf of the veteran. However it’s obtained, it must be included with every approved VA loan. Okay, but what about a veteran who is selling a house and buying another simultaneously and using the VA home loan for the second purchase? If the previous VA loan is still in existence along with the certificate, does the certificate simply get transferred?
Sort of, but the VA lender for the second time use helps facilitate the process. When approving a VA loan for subsequent use with an outstanding VA loan still in existence, the new VA lender approves the loan with the understanding the certificate will be forthcoming and approves the mortgage application while waiting for the updated certificate to arrive. The lender will keep a copy of the settlement statement showing the previous VA loan being paid off then requests directly from the VA an updated certificate. There really isn’t anything the borrowers need to do out of the ordinary as the lender does all the back office work.
