WASHINGTON – A new federal Internet-based system for mortgage bankers and other lenders will speed up the processing of home loans for veterans through the Department of Veterans Affairs (VA).
After the veteran’s information is entered by the financial institution providing the loan, the lender will receive a certificate authenticating the veteran’s eligibility in seconds. Previously, when a certificate of eligibility was needed, a form was submitted to VA and the certificate was mailed, a process that can take a week or more.
“This leap forward in VA automation is great news for the veteran anxious to close a loan and move into a new home,” said VA Under Secretary for Benefits Daniel L. Cooper. “When interest rates begin to change, getting loan procedures resolved quickly can be important to our veterans.”
The new system, called Automated Certificate of Eligibility (ACE), should be especially beneficial for active-duty members and veterans who are using their home loan benefit for the first time.
Last year VA guaranteed more than 250,000 loans valued at $31.2 billion. Approximately 80 percent of these loans require a certificate of eligibility. VA anticipates the ACE system will be able to generate a certificate for 30 to 50 percent of these loans. However, some loans will still require manual processing by VA, including veterans whose eligibility is based on National Guard or Reserve service, those with irregular discharges and those in several other situations.
Where the new electronic system is used, the eligibility certificate will be printed from the lender’s computer and it will be customized, bearing the date and lender’s name as well as a unique authorization number. For the veteran, that represents a change from the traditional certificate process in which the veteran often kept a copy of the certificate of eligibility to take to a prospective lender.
The ACE system will not reject any veterans for home loans and lenders will not be involved in deciding any eligibility issues. A veteran whose eligibility involves special issues requiring the traditional staff review may still request a certificate of eligibility in advance of approaching a bank or mortgage company with a loan application by sending in VA Form 26-1880, Request for Determination of Eligibility for VA Home Loan Benefits.
All lenders participating in the VA loan guaranty program have access to the system. Veterans or servicemembers interested in learning more about their VA home loan benefits or who wish to obtain forms may visit www.homeloans.va.gov on the Internet.
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