Can you use a VA loan more than once?
While it's possible to use a Veterans Administration (VA) loan more than once, there are certain restrictions and limitations to be aware of, especially when it comes to entitlements.
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Read on to learn more about how many times can you use a VA loan.
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What is a VA loan?
VA loans were created to help active-duty service members, Veterans, National Guard and Reserve service members and Veterans, certain eligible spouses, and other uniformed service personnel become homeowners.
VA loans are a type of non-conforming mortgage loans that don't meet Fannie Mae and Freddie Mac guidelines. Examples of non-conforming loans are other government-backed loans, including FHA and USDA, as well as jumbo loans.
Government-backed loans have more flexible lending requirements and have helped millions of people become homeowners.
Learn more about Non-Conforming Loans.
VA loan requirements
Veterans who wish to apply for a VA mortgage loan will need to meet lender requirements for
credit score and income, as well as requirements set by the Veterans Administration.
Prior to applying for a VA loan, you will need to get a Certificate of Eligibility (COE). Active Service Members and Veterans can get a COE if they didn’t receive a dishonorable discharge and they meet the
minimum active-duty service requirement based on when they served.
Minimum active-duty service requirements:
For service members. If you’ve served for at least 90 continuous days (all at once, without a break in service), you meet the minimum active-duty service requirement.
For Veterans. The minimum active-duty service requirements depend on when you served.
VA loan limits
If you have remaining entitlement for your VA-backed home loan, you can find out the current
loan limits and how they may affect the amount of money you can borrow without a down payment.
As of 2020, if you have
Full Entitlement, you don’t have a VA loan limit. Eligible Veterans, service members, and survivors with full entitlement no longer have limits on loans over $144,000. This means you won’t have to pay a down payment, and the VA guarantees to your lender that if you default on a loan that’s over $144,000, they’ll pay them up to 25% of the loan amount.
How many VA loans can you have at one time?
The VA does not limit how many VA loans you can have during your lifetime. However, it is only possible to have two VA loans at once, and both loans must be on your primary residence. Having two primary residences typically applies to active service personnel who have Permanent Change of Station (PCS) orders.
In these cases service members may keep their current home and turn it into a rental property, then purchase a new home in the new location, using a VA loan
What is the VA loan entitlement?
How many times can you get a VA loan will depend on your
eligibility and
entitlement. These are two common terms you will need to be familiar with when it comes to VA loans.
Eligibility refers to the basic criteria of appropriate length and character of service to utilize the home loan benefit. An eligible veteran must still meet credit and income standards in order to qualify for a VA-guaranteed loan.
Entitlement is the amount available for use on a loan. The amount of available
Basic Entitlement is $36,000. If you have not yet used your basic entitlement, then you are considered as having
Full Entitlement.
Your basic or full entitlement may be reduced if you have used entitlement in the past which has not been restored. This is known as having
Reduced Entitlement. If you previously used entitlement, which has not been restored, available entitlement is reduced by the amount used on the prior loan(s).
How do I restore my full entitlement?
You may be able to “restore” an entitlement you used in the past to buy another home with a VA direct or VA-backed loan if you meet at least one of these requirements.
To restore entitlement, at least one of these must be true:
- You’ve sold the home you bought with the prior loan and have paid that loan in full.
- A qualified Veteran-transferee agrees to assume your loan and substitute their entitlement for the same amount of entitlement you used originally.
- You’ve repaid your prior loan in full, but haven’t sold the home you bought with that loan (you can only do this one time).
To request an entitlement restoration, fill out a
Request for a Certificate of Eligibility (VA Form 26-1880) and send it to the VA regional loan center for your state.
Taking out a second VA loan: How it works
The amount of basic entitlement will be displayed near the center of your Certificate of Eligibility (COE). For example, it may say:
“THIS VETERAN’S BASIC ENTITLEMENT IS $_____. TOTAL
ENTITLEMENT CHARGED TO PREVIOUS VA LOANS IS $_____.”
For certain loans in excess of $144,000, additional entitlement may be available. For loans greater than $144,000, but less than $417,000, the maximum entitlement is 25% of $417,000, which equals $104,250.
For loans greater than $417,000, the maximum entitlement is 25% of the appropriate “loan limit,” which can vary by county. For a description of loan limits, as well as the limits for counties, visit the VA Loan Limits webpage. Please note county limits can change yearly.
Can a VA loan be used for a second home?
In some instances, VA Loans can be used to purchase a second home, if it is used as a second primary residence.
Can a VA loan be used for a vacation home?
No, A VA loan cannon be used to purchase a vacation home.
Can a VA used to purchase an investment property?
No, the VA cannot guarantee loans made for ineligible loan purposes which include purchase of unimproved land with the intent to improve it at some future date (that is, the land purchase is not in conjunction with a construction loan), or purchase or construction of a dwelling for investment purposes.
Why savvy consumers choose CU SoCal
For over 60 years CU SoCal has been providing financial services, including car loans, mortgages, Home Equity Loans, HELOCs, personal loans, credit cards, and other banking products, to those who live, work, worship, or attend school in Orange County, Los Angeles County, Riverside County, and San Bernardino County.
Please give us a call today at 866.287.6225 today to schedule a no-obligation loan consultation with a CU SoCal Member Services specialist.
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