In what situation is a Certificate of Eligibility necessary?

A Certificate of Eligibility is specifically necessary for VA loans. This document is essential because it verifies that a borrower is qualified for a VA loan based on their military service history. It provides lenders with the assurance that the borrower meets the requisite eligibility criteria established by the Department of Veterans Affairs.

In the case of FHA loans, while documentation is required for the underwriting process, a Certificate of Eligibility is not needed. Similarly, conventional and commercial loans do not require this specific certificate, as they rely on different underwriting standards and eligibility criteria. Thus, the Certificate of Eligibility serves a unique purpose within the realm of VA loans, distinguishing it from other types of financing.