source:
  type: guide
  id: va-m26-7-ch02-t02
  authority: VA Lenders Handbook (VA Pamphlet 26-7), Chapter 2, Topic 2 — What the
    Certificate of Eligibility Tells the Lender
  description: VA Lenders Handbook (VA Pamphlet 26-7), Chapter 2, Topic 2 — What the
    Certificate of Eligibility Tells the Lender.
  coverage_tier: operative
obligations:
- id: va-m26-7-ch02-t02-full
  canonical_id: va-m26-7-ch02-t02-full
  section: VA Lenders Handbook (VA Pamphlet 26-7), Chapter 2, Topic 2 — What the Certificate
    of Eligibility Tells the Lender
  type: do
  tags:
  - regulator-direct
  - va
  - va-handbook
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: VA Lenders Handbook (VA Pamphlet 26-7), Chapter 2, Topic 2 — What the
      Certificate of Eligibility Tells the Lender
    source_class: va-handbook
    source_url: https://www.benefits.va.gov/warms/pam26_7.asp
    snapshot_id: 488cf6b152dfffb7
    fetched_at: '2026-05-23T01:53:52Z'
    content_hash: sha256:b9f2259ef4bf182c8700374d01f483bbad8bde952afea193cdbca84386d635e6
    paragraph_quote: '2. What the Certificate of Eligibility Tells the Lender Change
      Date March 28, 2019 • This chapter has been revised in its entirety. a. Eligibility
      b. Amount of Entitlement The lender may rely on a COE as proof the Veteran is
      eligible for the home loan benefit. Although eligible for the home loan benefit,
      Veterans must still qualify based on income and credit before loan approval
      is granted. Entitlement is the amount available for use on a loan. The amount
      of basic entitlement is $36,000. This may be reduced if a Veteran has used entitlement
      before which has not been restored. The amount of basic entitlement will be
      displayed near the center of the COE. For example it may say: “THIS VETERAN’S
      BASIC ENTITLEMENT IS $_________ . TOTAL ENTITLEMENT CHARGED TO PREVIOUS VA LOANS
      IS $_______ .” For loans greater than $144,000, bonus entitlement may be available.
      For loans greater than $144,000, but less than $484,350, the entitlement is
      25 percent. For loans greater than $484,350, the maximum entitlement is 25 percent
      of the loan limit, which can vary by county. For a list of loan limits by county,
      visit http://www.benefits.va.gov/homeloans/lenders.asp. Please note county limits
      can change yearly. VA will post the limits for each year on our website as they
      change. The Veteran may have entitlement for loans greater than $144,000, the
      COE does not reflect the bonus entitlement. Instead, an asterisk by the word
      “available” refers to a note, which explains the possibility of additional entitlement.
      If the Veteran previously used entitlement, which has not been restored, available
      entitlement is reduced by the amount used on the prior loan(s). The lender has
      three options in this situation: • Make the loan knowing that VA’s guaranty
      is limited to the amount of available entitlement, or • Have the Veteran apply
      for restoration of previously used entitlement, or • The Veteran may provide
      a downpayment in conjunction with their remaining entitlement. Continued on
      next page VA Pamphlet 26-7, Revised Chapter 2: Veteran’s Eligibility and Entitlement
      2-6 2. What the Certificate of Eligibility Tells the Lender, continued VA Pamphlet
      26-7, Revised Chapter 2: Veteran’s Eligibility and Entitlement 2-7 c. Funding
      Fee Field and Conditions on the COE The “funding fee” field appears near the
      top of the COE. The exemption status, either “exempt”, “non- exempt” or “contact
      RLC” will appear to the right of this field: • Exempt status indicates a Veteran
      is exempt from paying the funding fee. • Non-exempt status indicates a Veteran
      is not exempt from paying the funding fee. • Contact RLC indicates a system-generated
      determination is not available, or any loan may need to be submitted to VA as
      prior approval. Lenders must be sure to comply with all “conditions” appearing
      near the middle portion of the COE: • For COEs with “exempt” status, the following
      “conditions” may appear: a) Funding Fee – Veteran is exempt from the funding
      fee due to receipt of service-connected disability compensation of $ _______________________monthly.
      b) Funding Fee – Veteran is exempt from the funding fee due to receipt of service-connected
      disability compensation. Monthly compensation rate has not been determined to
      date. c) Funding Fee – Please fax a copy of VA Form 26-8937 to the VA RLC of
      jurisdiction. d) Funding Fee – Please have the lender contact the VA RLC for
      loan processing. Please fax a copy of VA Form 26-8937 to the RLC of jurisdiction.
      • For COEs with a “non-exempt” status, the following “conditions” may appear:
      a) Funding Fee – Veteran is not exempt from the funding fee. b) Funding Fee
      – Veteran is not exempt from the funding fee due to receipt of non-service connected
      pension. Loan application will require prior approval processing by VA. • For
      COEs with “contact RLC” status, the following “condition” will appear: a) Funding
      Fee – Please fax a copy of VA Form 26-8937 to the RLC of jurisdiction of where
      the property is located. Continued on next page VA Pamphlet 26-7, Revised Chapter
      2: Veteran’s Eligibility and Entitlement 2-8 2. What the Certificate of Eligibility
      Tells the Lender, continued d. IRRRL Exemption Status The funding fee exemption
      status on IRRRLs is displayed in WebLGY at the time the case number is ordered.
      e. Exempt Status and Verified Income Lenders may rely on the “exempt” status
      appearing next to the “funding fee” field for verification of the funding fee
      exemption. If the dollar amount is different than what is shown on the COE,
      use the most recent bank statement or award disability award letter for verification.
      Additionally, on COEs with an “exempt” status, lenders may treat any service-connected
      disability income amount appearing in the “condition” section of the COE as
      verified income. There is no need to fax in VA Form 26-8937 to confirm the status
      or amount showing on the COE. f. Additional Conditions Listed on Some COE Forms
      Additional conditions that the lender and Veteran must comply with are listed
      on the COE, under the conditions heading. The following table provides the actions
      a lender should take for each condition, if applicable: Conditions What to Do
      Valid unless discharged or released subsequent to the date of this certificate.
      A certification of continuous active duty as of the date of note is required.
      Ensure the Veteran is still on active duty before closing the loan. If the Veteran
      is discharged or released prior to loan closing, request a new COE and do not
      close the loan until received. Excluded entitlement previously used for a VA
      LIN as shown herein is available only for use in connection with the property
      that secured that loan. If the entitlement used for the prior loan identified
      in this condition is needed for the proposed loan, ensure the proposed loan
      will be secured by the same property as the prior loan. (Cash-out refinance
      on a prior VA loan.) Continued on next page VA Pamphlet 26-7, Revised Chapter
      2: Veteran’s Eligibility and Entitlement 2-9 2. What the Certificate of Eligibility
      Tells the Lender, continued f. Additional Conditions Listed on Some COE Forms,
      continued g. The “Subsequent Use Funding Fee” Condition Conditions What to Do
      Entitlement previously used for a VA LIN has been restored without disposal
      of the property, under provision of 38 U.S.C. 3702(b)(4). Any future restoration
      requires disposal of all property or properties obtained with a VA loan. The
      Veteran must have proof that all properties with VA-guaranteed loans have been
      disposed. The Veteran is not exempt from the funding fee due to receipt of non-service
      connected pension. Loan application will require prior approval processing by
      VA. Non service-connected pension must be submitted to VA for prior approval.
      Concurrence is required from Pension Service, so allow extra time for processing.
      Funding Fee – Please fax a copy of VA Form 26-8937 to the RLC of jurisdiction.
      Please have the lender contact the RLC for loan processing. The Veteran has
      a fiduciary and the loan must be submitted to VA for prior approval. Concurrence
      is required from Fiduciary Service, so allow extra time for processing. The
      “Subsequent Use Funding Fee” indicates the Veteran has used their home loan
      benefit before, so a higher funding fee is required. VA Pamphlet 26-7, Revised
      Chapter 2: Veteran’s Eligibility and Entitlement 2-10'
  judgment: false
