Commonly known as VA home loans, mortgage loans backed by the Veterans Administration offer Veterans and active-duty servicemembers a way to buy a home with zero down payment and lenient credit and income requirements.

In order for a Veteran or active-duty servicemembers to establish eligibility, a Certificate of Eligibility (COE) needs to be requested from the Veterans Administration. A lender can request this for you — often within minutes. Listed on the COE is an entitlement code, which specifies how or what era earned service.

VA entitlement codes for 2023

COE entitlement codes are between 1 and 11 and identify either the time period during which you earned your entitlement or qualifying criteria that make you eligible for a VA loan. Each code represents a different way in which the veteran is eligible and will appear on the top left-hand portion of the COE.

Service codes exist for every era — both wartime and peacetime — for every era beginning with World War II. For example, “entitlement code 10” is for the Persian Gulf era, while “entitlement code 11” is for Selected Reservists.

It’s worth noting that “entitlement code 5” applies if you used up your eligibility on a previous home purchase, but have since sold the home and repaid your loan in full. Your entitlement may also be restored if someone else with VA-loan eligibility agrees to assume the previous loan from you.

VA entitlement code worksheet

VA entitlement dates of minimum service

The VA is very specific — down to the day — on dates of minimum service for the period in which the service was completed (also known as eras).

*Veterans who were discharged prior to meeting the minimum service requirement may still be eligible if released due to a service-connected disability.

**For more explanation for service during the mid Post-Vietnam era (1980) see page 2-15 of the VA Handbook here.

Other ways you may be eligible for a VA home loan

There are a few other ways to qualify for a VA home loan, including Active Reservists and those in the National Guard and un-remarried surviving spouses.

Note: Minimum service requirements apply different for spouses. For example, an “un-remarried spouse of a Veteran who died while in service or from a service-connected disability” is eligible regardless of whether his or her late spouse’s time served.

Basic vs. bonus entitlement — how it works

If you’re an eligible veteran, your basic entitlement is $36,000.

It’s a common misconception this means you can only borrow $36,000. But in fact, this is the cash sum the VA will pay your mortgage lender should you default on your loan (either $36,000 or 25% of the total loan, whichever is less). Most VA-approved lenders will advance you $144,000 even on a basic entitlement — for a $36,000 entitlement that would be a $144,000 loan.

But if you want to buy a home in a state where home prices are much higher your bonus entitlement — sometimes referred to as second-tier entitlement — can help.

In fact, you may actually be able to borrow up to $726,200, which is the Federal Housing Finance Agency’s (FHFA’s) cap on conforming loans in 2023.

The VA determines your bonus entitlement based on this national conventional conforming loan limit. Since the VA typically covers 25% of your loan amount, you may be entitled to a bonus entitlement of 25% of $484,350, or $121,087 (less your basic entitlement of $36,000).

This leaves you with $85,087 in second-tier entitlement. As mentioned above, most lenders will allow you to borrow up to four times your entitlement which means a potential loan limit of $340,350 — in addition to the $144,000 loan limit from your basic entitlement — bringing you up to the national conforming loan limit of $484,350.

Check your VA home loan eligibility

Many current active-duty service members and Veterans are surprised to learn that they have the necessary minimum service requirements to apply for a VA home loan. According to the most recent statistics, only 11% of Veterans have used their VA home loan benefits.

One of the biggest advantages of a VA home loan is zero down payment required and low interest rates. If you think there’s a chance you could be eligible, then you should contact a VA lender to how much you qualify for.