An applicant with 6 years in the National Guard is told she is not eligible for a VA loan because she was never deployed on active duty. What actually determines eligibility here?

Correct Answer

A) Confirm VA eligibility and occupancy requirements

Why this is correct: For a VA loan, two foundational requirements are veteran eligibility and owner-occupancy. The veteran must have qualifying military service to obtain a Certificate of Eligibility (COE), and they must intend to occupy the property as their primary residence. When a supervisory review raises a question about these items, the correct and primary action is to confirm both VA eligibility and occupancy requirements are documented and met. Why the other choices are wrong: "Use the consumer complaint standard to decide the VA Loan Entitlement Restoration issue before confirming the trigger facts" is wrong because entitlement restoration has specific VA rules based on facts like prior loan payoff; a consumer complaint standard is not the correct guideline. "Treat the VA guaranty as a substitute for occupancy verification" is wrong because the guaranty is a loss protection for the lender and does not fulfill the separate, mandatory requirement that the veteran certify and prove occupancy intent. "Ignore VA eligibility once credit and income are acceptable" is wrong because VA eligibility is a prerequisite separate from creditworthiness; a borrower with good credit but no VA eligibility cannot get a VA loan. Exam tip: For VA loan questions, always verify two things first: 1) The borrower's Certificate of Eligibility (COE), and 2) The signed Occupancy Certification. These are mandatory and distinct from the guaranty.