The VA home loan program provides an invaluable opportunity for eligible veterans, active-duty servicemembers, and surviving spouses to purchase a home with no down payment One of the best parts of VA loans is that they can be used more than once But how exactly can you go about using a VA loan for a second time? Let’s break it down.
As a VA loan borrower myself, I understand firsthand how confusing it can be to navigate the guidelines around reusing your VA home loan benefit. When my family outgrew our starter home, I wanted to tap into my remaining VA entitlement to buy a larger place. However, I wasn’t sure if this was allowed or how it worked.
After doing my research, I realized that reuse of VA loan entitlement is not only possible – it’s encouraged! The VA wants to help veterans and military families maximize this valuable benefit. In this article, I’ll walk through everything I learned about the process of using a VA loan twice.
What is VA Entitlement?
The key to being able to use a VA loan more than once lies in something called VA entitlement This refers to the amount of liability the Department of Veterans Affairs is willing to assume for your loan
For qualified VA borrowers, the VA guarantees a portion of your mortgage – usually around 25% of the total loan amount. Your available entitlement depends on what phase of service you’re in:
- For active duty servicemembers: Up to $417,000
- For veterans: Up to $424,100
So if you get a VA loan for $200,000, you will use around $50,000 of your total entitlement. The remaining balance can then be applied to a second VA loan in the future.
How To Restore Your Full Entitlement
Let’s say you used part of your VA entitlement to buy your first home. When the time comes to move up to a bigger place, how can you regain access to your full benefit amount?
The most straightforward way is to pay off and sell the initial home. Once the VA loan on the property has been repaid in full and the lender releases the lien, you can file to have your full entitlement restored.
This “restoration of entitlement” allows veterans who have fully paid off one VA loan to get back the portion they previously used, You’ll need to submit VA Form 26-1880 along with proof that the prior loan has been paid off,
After restoration, you’ll have 100% of your initial VA entitlement available to utilize for buying another home.
Using Your Remaining Entitlement
Maybe you don’t want to sell your first house right away. Is it possible to use your remaining VA entitlement while keeping the initial home?
The answer is yes – under certain conditions. VA guidelines allow you to have up to two active VA home loans at the same time, as long as you meet residency and occupancy requirements on both properties.
For example, let’s go back to our earlier scenario where you used $50,000 of your $417,000 entitlement on the first purchase. That would leave you with $367,000 left over for a second VA mortgage.
The catch is that between both loans, you can’t exceed the maximum entitlement amount. So in this case, your two VA loans together could not surpass the $417,000 cap.
Careful planning is required if you want to keep your first home instead of selling it when you buy a new place with VA financing. But it can be done with some calculations upfront.
Tips for Using VA Entitlement Twice
If you’ve determined that tapping into your VA benefit for a second time could work for your situation, here are some tips to make the process go smoothly:
-
Check your remaining entitlement – Your lender can help you confirm exactly how much eligibility you have left for another VA loan.
-
Consider refinancing the first mortgage – Changing your initial VA loan to a conventional mortgage can restore your full entitlement for the new purchase.
-
Review VA guidelines – Brush up on the latest rules around occupancy, residency, and overlapping VA loans so you avoid any pitfalls.
-
Discuss plans with your lender early – Outline your goals for reusing your VA financing benefit well in advance so they can offer guidance.
-
Watch out for higher VA funding fees – Using VA entitlement for a second time may result in a higher upfront VA funding fee, so budget accordingly.
Start your home loan journey today.
There are a lot of great mortgage options out there, but you might not see them if you work with a big bank. As Canada’s premier mortgage broker, we help you find the best mortgage option for you.
Our process puts you in control.
Convenient online access makes it easy to achieve your financial and homeownership goals.
Estimate your monthly payment
See how much home you can afford
Estimate your amortization schedule
VA Loan Secrets: What Veterans MUST Know about Using Multiple VA Loans (updated 2023)
FAQ
Can you use a VA loan 2 times?
How soon after using a VA loan can you use it again?
How to use your VA home loan a second time?
How many times can I use my VA loan certificate?
Are VA loans a one-time benefit?
VA loans are not a one-time benefit. Veterans and active-duty service members can use their VA loan benefits twice, three, four or more times. This article explores the guidelines and processes, helping you maximize this valuable opportunity to use VA loan benefits more than once.
Can you take out two VA home loans at once?
Generally, you can’t take out more than two VA home loans at once, as you’re supposed to reside or have resided in a home to take out a VA mortgage. This can happen when selling one home to buy another, or if keeping one home and then buying a home when assigned to a different military base.
What if I get a second VA loan with a reduced entitlement?
If you’re applying for a second VA loan with a reduced entitlement, your entitlement amount will be based on the maximum VA loan limit for your area (in most areas, this is $766,550 in 2024), minus the entitlement you’ve already used.
Can I use my VA loan twice?
The key to using your VA loan twice or more is entitlement. Veterans and active military members who meet the program’s service requirements have what’s known as VA loan entitlement. VA entitlement is a specific dollar amount the VA promises to repay to a lender if the Veteran defaults on the loan.
How much can you borrow on a second VA loan?
For example, in Phoenix the limit is $647,200. So, if your current mortgage is for $400,000, you could potentially borrow up to $247,200 (the difference) on your second home. When it comes to a second VA loan, there’s still a maximum amount you can borrow in total between the two homes.
How many times can you use a VA loan?
There is no maximum or limit on how many times you can use a VA loan. You can use a VA loan once, twice, three times or seven. As long as you have remaining entitlement, you typically always have the option to obtain another VA loan. Veterans United has even worked with a handful of Veterans on their 9th VA loan.