VA Underwriting Guidelines 


Veteran Eligibility
VA Entitlement
Proof of Service
Occupancy Requirement

VA Credit Guidelines
VA Income Guidelines
Residual Income
Debt to Income Ratios
Self Employed Income

Down Payment Guidelines
Maximum Loan Amount

Rate Term Refinancing
Cash Out Refinance
Energy Efficient Mortgage 

VA Property Eligibility
Appraisal Guidelines

Funding Fee
Closing Costs
Non Purchasing Spouse


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VA Entitlement - Loan Guaranty

The amount of available VA entitlement can be found at the center of the Certificate of Eligibility (COE) in the entitlement section. The maximum available entitlement that can be shown on the COE is $36,000. 

The veteran may use up to $60,000 of entitlement for certain loans greater than $144,000.  However, the COE will never reflect the additional $24,000 in the available entitlement amount shown. An asterisk by the word ďavailableĒ refers to a note which explains the additional entitlement. 

The amount of available entitlement an important item on a COE to a Lender because VAís guaranty on the loan generally cannot exceed this amount. An exception is the additional $24,000 entitlement available on certain loans greater than $144,000. 

If the available entitlement shown is less than $36,000 it is for one of two reasons: 

  • The maximum entitlement has been changed by law since VA issued the COE
  • The veteran previously used entitlement that has not been restored. 


The changes in the law which impacted the maximum available entitlement are shown in the table below. 

Max Entitlement on COE

Beginning Date

$36,000 February 1, 1988
$27,500 October 1, 1980
$25,000 October 1, 1978
$17,500 December 31, 1974

If the COE shows the available entitlement equal to the maximum in effect on the date the COE was issued or last updated, there is no need to have the COE updated to reflect the current maximum. The lender can assume the veteran now has $36,000 available. 

However, if the veteran previously used the entitlement which has not been restored then the available entitlement is reduced by the amount used on the prior loan.  In this case the lender has only two options:

  • Make the loan knowing that VAís guaranty is limited to the amount of available entitlement, or 
  • Have the veteran apply for restoration of previously used entitlement. 

Note: The additional entitlement of up to $24,000 may be used for certain loans above $144,000 even if the veteran has no entitlement or partial entitlement. However, in such cases the lack of full entitlement will likely result in lenders receiving less than a 25 percent guaranty from VA. It is the lenderís responsibility to ensure they are able to sell their loan on the secondary market.

Partial Entitlement

Lesser of sales price or value X 75% plus remaining entitlement = maximum base loan amount (Loan amount excluding funding fee may not exceed lesser of sales price or value).

Subordinate Financing Calculations

In the case of subordinate financing: maximum total financing minus amount of VA first trust deed = maximum amount of subordinate financing. (Sales price less maximum total financing = down payment required).

Restoration of Eligibility for Full Entitlement

Entitlement previously used in connection with a VA home loan may be restored under certain circumstances. Once restored it can be used again for another VA loan. Restoration of previously used entitlement is possible if:
  • The property which secured the VA guaranteed loan has been sold, and the loan has been paid in full, or 
  • An eligible veteran-transferee has agreed to assume the outstanding balance on a VA loan and substitute his or her entitlement for the same amount originally used on the loan. The assuming veteran must also meet occupancy, income and credit requirements of the law. 
  • The prior VA loan has been paid in full and the veteran has made application for a loan to be secured by the same property which secured the prior VA loan, (This includes refinancing situations in which the prior loan will be paid off at closing from a VA refinancing loan on the same property.) 
  • The prior VA loan has been paid in full, but the veteran has not disposed of the property securing the loan. The veteran may obtain restoration of the entitlement used on the prior loan in order to purchase a different property one time only. Once such restoration is effected, the veteranís Certificate of Eligibility will indicate the one time restoration. It will also advise that any future restoration will require disposal of all property obtained with a VA loan. 

The veteran must complete and send VA Form 26-1880, Request for a Certificate of Eligibility, to the appropriate Eligibility Center. If the veteran has evidence of payment if full of any prior loans (HUD-1, settlement statement, etc), a copy should be included. Additionally, any previously issued COEs should be included. 

If the veteran is applying for restoration in order to obtain another VA loan on the same property (as described above), the veteran should include a copy of the loan application submitted to the lender along with VA Form 26-1880. 

Unmarried surviving spouses applying for restoration of entitlement also need to complete VA Form 26-1880 supplying the deceased veterans military service data and VA claims file number. 

Missing COE

If the veteran's COE has been lost, stolen or destroyed, the veteran must  submit a completed request form (VA Form 26-1889) with required proof of military service and mail it to an eligibility center.

ACE (Automated Certificate of Eligibility)

ACE allows lenders to input data about a specific veteran-borrower and obtain an eligibility determination on most cases in a matter of seconds from the Internet. ACE eliminates completing VA Form 26-1880, Request for a Certificate of Eligibility, mailing it to an eligibility center and waiting for a reply by mail. 

The ACE application is intended for use by lenders who have the veteranís permission to obtain an eligibility determination for them. The use of the system will be monitored for security and administrative purposes and accessing the system constitutes consent to such monitoring. 

Eligibility is Established: The lender prints out the COE to be submitted with the guaranty package.

Eligibility is not established:  The lender has the veteran complete VA Form 26-1880. Once completed, the lender should send it and the veteran's proof of service to the Eligibility Center of jurisdiction.

Eligibility is established but the veteran has partial or no available entitlement:  The lender has the veteran complete VA Form 26-1880. Once completed, the lender should sent it, the veteran's proof of service and evidence of a paid in full status for the previous loan to the Eligibility Center of jurisdiction.

Eligibility is established but the print out shows no entitlement on a loan that shows paid-in-full status:  The lender has the veteran complete VA Form 26-1880. Once completed, the lender should sent it and the veteran's proof of service to the Eligibility Center of jurisdiction for restoration of entitlement processing.

Specially Adapted Housing

The law expands eligibility to the $50,000 Specially Adapted Housing (SAH) grant to veterans with permanent and total service-connected disabilities due to the loss of, or loss of use, of both upper extremities such as to preclude use of the arms at or above the elbows. In addition, Title 38, Section 1151, is amended to specify eligibility where any veteran has suffered an injury, or an aggravation of an injury, as the result of hospitalization, medical or surgical treatment, as if it were service-connected for benefits under Chapter 21, relating to SAH. 



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