What Is a COE in a Mortgage?

In mortgage jargon, COE refers to Certificate of Eligibility and more specifically to certification of a veteran's eligibility for a guaranteed mortgage loan. The United States Department of Veterans Affairs administers a loan guaranty program designed to provide veterans of the armed forces with an opportunity to qualify for and obtain a home mortgage. In the initial part of the process, a COE is required to prove the veteran's eligibility to apply for the benefits of the program.

TL;DR (Too Long; Didn't Read)

In a VA loan, COE stands for "Certificate of Eligibility." It is required to determine whether the veteran is eligible for a home mortgage that is backed by the United States Department of Veterans Affairs .

VA Loan Benefits

The VA has guaranteed more than 18 million home mortgages through the program. VA loans are not only used to make a first-time purchase of a home but for building a home or refinancing one through the program to obtain better mortgage contract terms. Regardless of the use of the loan, a COE is required upfront in the application process. This ensures that only eligible individuals receive the benefits of the program.

Obtaining Lender Assistance

VA lenders can often complete the COE for the veteran through the Automated Certificate of Eligibility. To go through the online system, applicants need the name of the service person and Social Security number. This Internet system, known as ACE, will not process a COE for reserve and National Guard members. In addition, veterans who have previously been approved for a VA loan but experienced foreclosure cannot use the automated system to obtain a COE. Instead VA Form 26-1880 should be completed.

Surviving spouses of service members should use VA Form 26-1817 to seek a certificate of eligibility. Surviving spouses cannot use the online automated system to request a COE.

VA Form 26-1880

The paper VA Form 26-1880, a Request for a Certificate of Eligibility, requires the veteran to provide basic identifying information and a brief, concise record of military service. Name, date of birth and Social Security number are required. Contact information and a VA claim number, if known, should also be included. The form provides an area for the veteran to supply military service information such as the branch of service, dates served and a service number if this is different from the Social Security number. Previous VA loans must also be reported on the COE request form along with whether the request is for a first-time loan or a refinance.

Proof of Service

When completing VA Form 26-1880 to validate eligibility, the veteran should also supply the processing center with proof of service, according to the Department of Veterans Affairs. For service members on active duty, a statement from a personnel officer or commander is needed. If the service member has been discharged, a copy of DD Form 214, the veteran's discharge papers, should accompany the request for a COE.

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