One of the most valuable features of the VA home loan benefit is that it is not limited to a single home purchase. Eligible Veterans and service members may be able to use a VA-backed home loan multiple times throughout their lives.
How you reuse the benefit depends largely on your available VA entitlement, whether a previous VA loan has been paid off, and whether you still own a property purchased with VA financing.
How Many Times Can You Use a VA Loan?
There is no set lifetime limit on the number of times an eligible borrower can use a VA home loan benefit. You may be able to use it repeatedly as long as you continue to meet VA eligibility requirements and have sufficient entitlement available for the transaction.
Using a VA loan does not permanently use up your benefit. In many situations, previously used entitlement can be restored and used for another VA-backed mortgage.
How Does VA Entitlement Restoration Work?
The most common way to restore VA entitlement is to sell the home purchased with the previous VA loan and pay that loan in full. Once the applicable entitlement is restored, it may be available for another VA home purchase.
Restoration may also be possible when another qualified Veteran assumes the existing VA loan and substitutes their own entitlement for the entitlement originally used.
Veterans can request entitlement restoration through the VA, and a lender may also be able to assist with the Certificate of Eligibility process.
Can You Keep Your Home and Restore VA Entitlement?
In a specific situation, yes. If you pay your previous VA loan in full but keep the property, the VA may allow a one-time restoration of the entitlement used for that loan.
This can apply, for example, when a Veteran refinances an existing VA mortgage into a non-VA loan but continues to own the home. Because this type of restoration is generally available only once, it is important to understand the long-term impact before using it.
Can You Have Two VA Loans at the Same Time?
It may be possible to have more than one VA-backed mortgage at the same time when you have remaining entitlement and meet the applicable occupancy, income, credit, and underwriting requirements.
For example, a service member who receives a permanent change of station may want to keep a previous home while purchasing a primary residence in a new location. Remaining entitlement may potentially make another VA purchase possible.
When you do not have full entitlement, county loan limits are used in determining the amount of remaining VA guaranty available. Depending on the new loan amount and available entitlement, a down payment may be required.
Does Full VA Entitlement Mean You Can Borrow Any Amount?
No. Veterans with full entitlement are not subject to a VA county loan limit for determining the amount they can borrow without a down payment, but that does not mean there is unlimited borrowing power.
The lender must still approve the mortgage based on factors such as income, debts, assets, credit history, and the property's appraised value. The purchase price and appraisal can also affect the maximum loan available for a particular property.
Do Repeat VA Borrowers Pay a Different Funding Fee?
A VA funding fee applies to many VA loans unless the borrower qualifies for an exemption. For purchase loans with less than 5% down, the current funding fee is generally 2.15% for first use and 3.3% for subsequent use.
The percentage can differ based on the loan type and down payment, and certain Veterans, service members, and surviving spouses are exempt from paying the funding fee. Check your specific eligibility and loan structure before calculating costs.
Make the Most of Your VA Home Loan Benefit
Your VA home loan benefit can potentially support more than one chapter of homeownership. Whether you are selling your current home, relocating, purchasing again after paying off a previous VA loan, or considering another property while retaining your current home, understanding your entitlement is an important first step.
Loan Wolf Lending can help eligible Veterans and service members in Florida review their Certificate of Eligibility, available entitlement, and VA mortgage options. Call 754-755-3075 to discuss your next home purchase.