Can You Get More Than One VA Loan? Everything You Need To Know

If you’re a veteran or active military looking to buy a home, you likely know about VA loans. VA loans offer great benefits like no down payment and flexible credit requirements. But can you get more than one VA loan?

The short answer is yes, you can get multiple VA loans throughout your life. However there are some caveats around entitlement and eligibility you need to understand first.

In this comprehensive guide I’ll explain

• How VA loan entitlement works
• When you can qualify for an additional VA loan
• Tips for restoring your full entitlement
• Options for buying another home while renting out your current one
• How funding fees work on additional VA loans
• And more

Let’s dive in!

How Does VA Loan Entitlement Work?

The key to getting more than one VA loan is understanding your remaining entitlement.

Entitlement refers to the amount of the loan the Department of Veterans Affairs (VA) guarantees. For most VA loans, entitlement is 25% of the loan amount.

So if you get a $200,000 VA mortgage, the VA provides entitlement of $50,000 (25% of $200,000).

This entitlement guarantee gives lenders confidence to offer VA loans with:

• Zero down payment
• Lower interest rates
• Lenient credit requirements

According to the VA, here are the standard entitlement amounts:

• Up to $36,000 for your first VA loan
• Plus additional entitlement of $144,000
• Totaling $180,000 in entitlement

However, the specific amount may vary by county. High-cost counties can qualify for increased entitlement above $144,000.

Now here’s the catch – each time you use your VA loan benefit, all or part of your entitlement gets used up.

So if you’ve already purchased a home with a VA loan, you likely have partial entitlement remaining for another VA mortgage.

When Can You Get Another VA Home Loan?

There are a few scenarios where qualifying for an extra VA loan is possible:

1. Refinancing Your Current VA Mortgage

With a VA streamline refinance, you can refinance your existing VA loan into a new one to lower your rate or payment.

While your entitlement stays tied up, this lets you take advantage of lower rates without closing costs.

You can also do a VA cash-out refinance to tap equity for renovations, debt consolidation, or other uses.

2. Selling Your Current Home and Buying Another

The most straightforward way to restore full entitlement is to sell your current home and pay off your VA loan.

Once that loan is paid off and you no longer hold the title, your full entitlement is restored.

This lets you purchase another home with zero down payment and full entitlement coverage.

3. Buying a Second Home Before Selling the First

Sometimes timing requires you to buy a new house before selling your current one.

For example, active duty service members with PCS orders often need to move quickly.

In this case, you can buy before selling if:

• You still have available entitlement after your first VA loan
• The lender approves you holding two mortgages
• Your debt-to-income supports both payments
• Your second home is larger or in a different area than the first

You cannot use rental income from the first home to offset the payment on the second home.

Tips for Restoring Your Full VA Entitlement

If you need your full entitlement back, here are some options:

Sell to another veteran who assumes your loan. If the buyer is a veteran, they can substitute their entitlement for yours. This restores your full initial entitlement.

Request a one-time restoration. The VA allows veterans to restore full entitlement once in their lifetime, even without selling. Requirements include:

• The prior VA loan must be paid off
• You have no outstanding VA debt
• It’s been at least 2 years since getting the prior VA loan

Fully repay the loan. If you keep the home but eventually pay off the mortgage, your entitlement is freed up. Make extra payments to pay it off faster.

Wait for entitlement to restored. Over time, entitlement is automatically restored as you pay down the loan. But this takes longer.

What About Renting Out and Buying Another Home?

Can you rent out your current home and purchase another primary residence with a VA loan?

Yes, it’s possible – with limitations. According to the VA:

• Your second VA loan must be for a larger home or different location
• Rental income from the first home cannot offset your DTI for the second
• You must qualify for both mortgage payments simultaneously

While doable, it’s critical to discuss with a lender first to ensure you use entitlement appropriately.

How Much Are VA Funding Fees on Another Loan?

All VA loans require a funding fee paid at closing. This fee helps offset costs from borrowers who default.

On your first VA loan, the fee is 2.3% of the loan amount. But on another VA loan, the fee increases:

• 3.6% with 0% down payment
• 1.5% with 5% down
• 1.25% with 10% down

So be prepared for a higher fee when getting another VA loan. But you can roll this fee into your loan amount instead of paying upfront.

The Bottom Line

Veterans can absolutely get more than one VA loan in a lifetime.

Taking the time to understand entitlement, restoration options, and fees allows you to maximize your loan benefits.

And working with an experienced VA lender makes the process smoother when pursuing additional VA mortgages.