VA Entitlements
VA Loan Entitlements Defined
A VA Loan Entitlement refers to the dollar amount that the VA guarantees on loans to veterans and other qualified military personnel. The VA bases its determination on the income of the veteran, and the majority of lenders like our VA Loan company lend up to four times of the entitlement. The entitlement amounts vary widely since they’re based on veterans’ incomes.
Getting a VA Entitlement
Before getting an entitlement letter, veterans first have to have a Certificate of Eligibility in hand. Veterans are automatically provided a Certificate of Eligibility when they are discharged, but if they lose or misplace them they can request another one from the Department of Veterans Affairs.
Because the length of time it takes to receive your Certificate of Eligibility will vary depending on the load at the Department of Veterans Affairs, it is wise to put in your request for it as soon as you decide to utilize your VA Entitlement to take out a VA Loan. Current personnel on active duty can proved LES records, and veterans fill out a DD 214 Form. In order to get a Certificate of Eligibility, you have to have been honorably discharged.
Speeding Up the Entitlement Process
While you cannot rush the Department of Veterans Affairs and they will process your DD 214 form as soon as they are able, there are a few processes you can do on your end to make sure the VA has everything they need.
If you want to apply for a VA Loan and need a VA Entitlement, you should:
- Make sure you filled out the DD 214 Form completely and accurately
- Apply for a Certificate of Eligibility at the very beginning of your search for a new home
If you plan to be in the market for a new home in the next couple of years or so, checking your personal credit history now is a wise move. Doing so will give you the time to remedy any errors or falsehoods on your credit report, which will give you a higher credit score and improve the chances of getting a VA Loan with optimal terms. Collections and bankruptcies have to be fully paid and closed one to two years prior to your application for a VA Home Loan.
VA Entitlement Amounts
For a VA Home Loan, the entitlement amount will vary according to the maximum value of home prices in the county where the home is. The maximum entitlement amount is $417,000 in most counties, but in some it can be as high as the $700,000s for regular VA Home Loans.
How Entitlements Work
Many military personnel are under the impression that the VA lends the money directly to the veterans. This is not the case, however. Various lending institutions like our VA Loan company actually lend the money to veterans, under the stipulation that the VA guarantees the loan. By ‘guaranteeing’ the loan, the VA agrees to insure the loan in case the veteran defaults or his or her house goes into foreclosure.
Once a veteran, Reservist or National Guard member qualifies for a VA Loan Entitlement, they can get a VA Loan for the rest of their life. Entitlements do not expire. That being said, however, you may need to obtain a renewal of your Certificate of Eligibility if you got it more than one year ago.