What Are Entitlement Codes

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What are VA Entitlement codes? In this post, we are going to explore some of the VA Entitlement Codes and their meanings. Before that, let’s talk about the reason why there are entitlement codes.

The codes are used to categorize, and with each code, there is a corresponding VA Funding Fee. The VA Funding Fee is paid directly to the Department of Veterans Affairs and it’s the reason the VA Home Loan program is still in place (and has been since the end of WWII).

Since the Department of Veterans Affairs guarantees a portion of the loan, the funding fee helps back this with funds. So if a veteran, unfortunately, has a foreclosure, the VA will have the money to pay off the loan.

Lenders will, in turn, keep offering loans with VA benefits since they know they have government backing and they can assume less risk.

Think about it like this. The VA Funding Fee is veterans helping veterans.

VA Entitlement Code Worksheet

Here is what the full VA Entitlement Code Worksheet looks like:

01 – World War II
02 – Korean War
03 – Post-Korean War
04 – Vietnam War
05 – Entitlement Restored
06 – Surviving Spouse
07- Spouse of POW/MIA
08 – Post World War II
09 – Post-Vietnam
10 – Gulf War
11 – Selected Reserves

In this post, we are only going to cover:

06 – Surviving Spouse
07 – Spouse of POW/MIA
10 – Gulf War
11 – Selected Reserves
05 – Entitlement Restored

If you want any information on the codes that we didn’t cover, these can be found in Chapter 2, Section 9 of the VA Lenders Handbook.

VA Entitlement Codes Breakdown

VA Entitlement Codes 06 and 07 Surviving Spouse – Spouse of POW/MIA

For these two codes, there is no requirement to pay a VA Funding Fee. But if you are listed under one of these codes, make sure you have your VA Certificate of Eligibility (COE) before you do a VA refinance or purchase a home loan.

Getting a COE is a time-consuming process and that’s why it’s recommended that you have it beforehand.

Entitlement Code 10 – Gulf War

This entitlement code does have a VA Funding Fee associated with it, and that fee is 2.15% of your purchase.

For example, if you purchase a home for $100,000, that means the Department of Veterans Affairs will add a funding fee of $2,150 onto the purchase of your loan.

So your mortgage statement will total up to $102,150.

Entitlement Code 11 – Selected Reserves

Members of the National Guard and reservists must have at least six years of credible service. This means you did at least one drill a year for a span of six years. If you meet this requirement, you’ll pay a higher funding fee of 2.4%.

But there is a caveat. If you spent at least 90 days in a combat zone, then you’ll qualify as a Gulf War veteran and you’ll also pay the lower funding fee.

Entitlement Code 05 – Entitlement Restored

This is for individuals who are looking at buying another home and have used the VA Home Loan benefits before. This entitlement code is going to have a higher funding fee of 3.3%.

VA Disability Entitlement

If you have received a service-related disability when discharged from your military service, the VA Funding Fee is waived.

In regards to disability, something most people don’t know is that you might be up for some tax benefits. For example, in some states (TX and SC) you don’t have to pay property taxes based on your disability rating.

You will need a letter from your County Assessor’s Office if you live in a qualified county/state. And this can be shown to your lender.

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