The VA loan is a great way for veterans to secure 100% financing for a home. The VA has flexible guidelines, including low credit score requirements. In addition to your standard qualifying documents, such as paystubs and W-2s, veterans have a few additional documents they must provide including the VA Statement of Service.
The Statement of Service Defined
First, the Statement of Service applies to those still active in the military or Reserves. This is an alternative to the typical Verification of Employment lenders conduct when a borrower applies for a loan. If you are still active in the military, the lender needs to verify the details, which they do with the Statement of Service.
The Statement of Service or SOS shows the following:
- Your name, date of birth, and social security number
- The branch of service and rank
- The date you started active duty or Reserve duty
- The date you separated from the military or Reserves
- Information regarding your ability to re-enlist
- Information if a Reservist is active or inactive
- Amount of pay and its duration of continuance
All of this information is completed by your commanding officer and should be written on military letterhead, signed and dated.
Basically, the lender needs to know that you are making money and will make money for at least the next three years. That’s why it’s easier for veterans that have already discharged from the military and have civilian jobs. They can prove their job history and their employer can confirm that they are employed for the foreseeable future.
The VA Guidelines
The VA is very lenient with its guidelines. For example, they don’t have a minimum credit score or maximum debt ratio you must have. They leave it up to the lender to use their best judgment when deciding if a borrower is a good risk.
One thing you have to be able to prove beyond a reasonable doubt though is the presence of disposable income each month. The VA wants to know that you have enough money to cover the daily cost of living without struggle. The exact amount you need varies based on where you live and the size of your family. Obviously, the larger your family’s size, the more money you need to survive.
If you know you need a VA Statement of Service, it’s important to order it ahead of time. Military commanders are busy, so you should get your request in as early as possible as it could take many weeks to get your hands on the lender.
The combination of the SOS and the Certificate of Eligibility will let lenders know that you are eligible for a VA loan and allows them to verify that you can afford it. Without these important documents, you wouldn’t be able to get a VA loan, so make sure you have the documents you need before you get started.