The eligibility, funding fee, income, and appraisal task lists our team works inside the CRM — written against VA Lenders Handbook M26-7 and ready to import as task templates.
No-obligation VA pre-qualification review.
A VA underwriting checklist is the document set a VA file must clear before funding: the Certificate of Eligibility, funding fee exemption evidence, income and residual income documentation, and the VA appraisal and Notice of Value. Each item below is tied to the VA Lenders Handbook M26-7 and grouped by stage and owner.
If your COE, employment, and residual income documentation are handled as separate tracked steps, nothing surfaces as a surprise condition before closing.
Reviewed by the licensed mortgage team at Simply Approved Mortgages · Last verified August 31, 2026 against the VA Lenders Handbook (M26-7)
See the full VA requirementsVerified against VA Lenders Handbook M26-7, Change 6 — August 12, 2026
Reviewed by the Simply Approved Mortgages underwriting desk — Licensed mortgage originators (NMLS) — Colorado & Florida. Every item is tied to a VA Lenders Handbook M26-7 chapter; lender overlays are labelled separately.
The COE is the single document that unlocks the VA loan benefit. It confirms service, discharge status, entitlement, and funding-fee exemption status. Order it early — a lender can pull it through WebLGY in most cases without waiting on the veteran.
Ask the veteran which service category applies: veteran, active duty, Guard/Reserve, or surviving spouse
Each category needs a different supporting document to obtain the COE (VA.gov — How to Request a COE).
Pull the COE instantly through the lender's WebLGY access when possible
Collect DD-214 (Member 4 or Service 2 copy showing character of service) for separated veterans
Collect a Statement of Service, signed by the commander or personnel officer, for active-duty applicants
Collect NGB-22 (Report of Separation) or current points statements for Guard/Reserve applicants
Collect VA Form 26-1817 plus the veteran's DD-214, or DIC award documentation with VA Form 21P-534EZ, for surviving spouses
File VA Form 26-1880 by mail only if WebLGY and self-service options are unavailable
Confirm entitlement type on the COE: full entitlement vs. reduced/partial entitlement from a prior VA loan
Partial entitlement borrowers are subject to FHFA conforming loan limits; full-entitlement borrowers are not (VA.gov — Loan Limits).
Check the COE's funding fee exemption code and verify supporting evidence if it shows an exemption
For entitlement restoration cases, confirm the prior VA loan is paid in full and the property sold, or that this is a one-time restoration
A funding fee exemption is worth thousands of dollars financed out of the loan. Confirm and document it before closing rather than relying on a refund after the fact.
Check the COE for a funding fee exemption code before quoting the veteran a fee
For veterans receiving VA disability compensation, confirm the rating decision letter matches the COE
Also exempt: veterans who would be entitled to compensation but for retirement or active-duty pay, and those rated eligible from a pre-discharge exam (VA.gov — Funding Fee and Closing Costs).
For active-duty Purple Heart recipients, collect the award evidence before closing
For surviving spouses, confirm DIC receipt or the service-connected cause of death on the award letter
If a disability rating is pending at closing, disclose that the fee will be charged now and may be refunded later if the rating is approved
File the funding fee refund request with the lender/VA once a retroactive rating is granted
Residual income, not DTI alone, is the VA's signature underwriting test. Build the worksheet early — it can save a file that a straight DTI reading would decline.
Collect two years of employment history and W-2s; document any gaps
For active-duty income, collect the most recent Leave and Earnings Statement (LES)
The LES documents base pay plus BAH, BAS, and any special/incentive pay used to qualify.
Confirm which LES entries (BAH, BAS, clothing allowance, special pay) are stable and continuing, and document accordingly
Determine the applicable region (Northeast, Midwest, South, West) and family size for the residual income table
VA Lenders Handbook M26-7, Ch. 4.
Complete the residual income worksheet: gross income minus taxes, proposed housing payment, and all other debts
If DTI exceeds 41%, document residual income at least 20% above the regional requirement or other compensating factors
Route to manual underwriting if the automated engine cannot render a decision or the file needs compensating-factor analysis
The VA appraisal does double duty: it sets value and confirms the home meets Minimum Property Requirements (MPRs). Track Tidewater and the NOV closely — they are the two points where a deal can stall or die.
Order the VA appraisal through the VA portal; confirm assignment to a VA-approved appraiser
Disclose that the veteran may pay the appraisal and credit report fees
Review the appraisal for Minimum Property Requirements: heat, water/sewage, roof, wiring, safe access, no wood-destroying-insect damage in designated areas
VA Lenders Handbook M26-7, Ch. 12.
If value looks likely to come in below contract, initiate the Tidewater notification to the lender before the NOV is issued
Confirm the Notice of Value (NOV) is issued and matches the contract price or triggers next steps
If the NOV comes in under contract price, present the VA Amendment to Contract / escape clause option to the veteran
The veteran may walk away and recover earnest money if value is short and the seller will not adjust price.
File a Reconsideration of Value (ROV) with supporting comps if the appraisal appears inaccurate
For renovation loans, confirm the appraiser is valuing the property subject to completed repairs
Documented conditions from current VA program guides across the VA lender network we shop — the items that most often surprise a veteran after the offer is accepted.
The primary borrower must be the veteran, with entitlement shown on the Certificate of Eligibility. A veteran plus spouse is fine. Joint loans with an unmarried non-veteran co-borrower are not allowed at most lenders, and dual-entitlement loans go to the VA for final sign-off after underwriting.
Every appraisal is ordered through VA WebLGY and assigned to a VA-approved appraiser, with an interior and exterior inspection. The Notice of Value is valid for six months, and no second appraisal can be ordered on a property that already has a valid VA value determination.
120 days for existing construction and 180 days for new construction, measured to the note date. Preliminary title cannot be older than 180 days at signing.
A full tri-merge is required on every transaction, including IRRRLs, where it verifies a 12-month mortgage history and a score for each borrower. In community property states a non-purchasing spouse's credit is pulled too.
An impound account for taxes and insurance is required. Escrow holdbacks for weather-delayed repairs are permitted under VA rules, with a 1004D completion report after funding.
Capped at 4% of the reasonable value on the Notice of Value. Normal discount points and payment of the buyer's closing costs sit outside that 4%. Unused concession room can pay off borrower debt to help qualify.
If there is written evidence the debt is deferred at least 12 months beyond closing, no monthly payment has to be counted.
No prepayment penalty is permitted on any VA loan, and VA loans remain assumable by a qualified buyer with VA approval.
A veteran can receive up to $500 back for payoff changes, computational errors, or reimbursement of an out-of-pocket cost such as the credit report — $0 in Texas. A loan may never be sized with the intent of returning cash.
Six months of PITI in reserves is required when rental income from a 2–4 unit subject property is used to qualify, and three months when rental income from any other property is used. Income from an accessory dwelling unit cannot be used to qualify at all.
A gift of equity from a family-member seller is an acceptable source of down payment on a VA purchase — relevant when a veteran buys above what full entitlement supports, or wants a lower loan amount.
Manufactured housing must have been constructed after June 15, 1976. Single-wide, multi-wide, manufactured condos and modular single-family homes are all eligible at the more permissive investors, though most of the network takes multi-wide only and prices it with a higher score floor.
A property served by an individual water purification system is ineligible where public water is unavailable and the local aquifer has been confirmed contaminated by the health department.
Every VA refinance is tested twice: once on seasoning, once on whether it actually helps the veteran. Source: 38 CFR 36.4300(c)(1) and VA Circular 26-19-05.
Every refinance into a VA loan must be seasoned the greater of 210 days from the first payment due date or six consecutive on-time monthly payments from the note date. No exceptions, and the prior Closing Disclosure is required to evidence it.
If a borrower made five consecutive payments before a forbearance, six additional consecutive on-time payments are required after the forbearance.
On a Type I cash-out (new loan does not exceed the payoff), fees must be recouped within 36 months of closing.
A Type I fixed-to-ARM refinance requires the new rate to be at least 2.00% below the old rate, and that reduction cannot come solely from discount points. Above one discount point financed, the LTV is capped at 90%.
Every cash-out loan must pass the net tangible benefit test and be delivered a net tangible benefit and loan comparison disclosure within three business days of application, including an estimate of the home equity being removed.
Operational reference for licensed originators and processors. VA rules and lender overlays are labelled separately; overlays vary by lender, investor, and file. Simply Approved Mortgages does not represent that every VA program listed is available until lender access and state licensing are confirmed. Nothing here is a quote, rate lock, offer, or commitment to lend.
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SAM is the Simply Approved Mortgages AI assistant, grounded in the VA Lenders Handbook M26-7, 38 CFR Part 36 and the county loan-limit file behind this page. It answers general VA questions. A licensed mortgage loan originator reviews every scenario before any terms are confirmed.
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AI assistant — general VA loan education only, not financial, legal or tax advice, not a loan approval, pre-approval or commitment to lend. Simply Approved Mortgages LLC (NMLS #2620881) is an independent mortgage broker and is not the VA, HUD or any government agency, and is not endorsed by them. All loans are subject to lender underwriting, appraisal and final approval. Equal Housing Opportunity.
Lenders may review your credit as part of underwriting, and the requirements vary by lender. The VA itself sets no minimum credit score; individual lenders set their own guidelines. Knowing what is on your reports before you start makes it easier to correct errors and understand the options a lender may be able to consider.
Simply Approved Mortgages uses CIC SmartPay to securely collect the credit report fee for your VA pre-approval. Payment goes directly to the credit vendor — not to us — and unlocks your tri-merge report (Equifax, Experian, TransUnion) so your loan officer can price your file.
You'll be redirected to CIC SmartPay.
Before you apply, it's smart to know exactly where your credit stands. MyITINCredit offers a $1 trial for 15 days that includes all three credit reports and scores, plus ongoing monitoring so you can catch errors, dispute inaccuracies, and watch for identity theft.
You'll be redirected to myitincredit.com. Third-party service — terms apply.
Credit report fees are paid directly to the credit vendor. Simply Approved Mortgages does not profit from the credit pull. MyITINCredit is an independent third-party service; pricing, terms, and features are set by that provider.
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Veterans receiving VA disability compensation pay $0 funding fee — often the single biggest savings in the entire loan. Here's how the exemption is proven and refunded.
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