Can You Get More Than One VA Loan?

The VA loan program offers a significant benefit for eligible service members, veterans, and surviving spouses, facilitating homeownership with favorable terms. It is possible to obtain multiple VA loans throughout a lifetime. This article will explain how entitlement works, how it can be restored, and how remaining entitlement can be utilized for subsequent purchases.

Understanding VA Loan Entitlement

VA loan entitlement represents the amount the Department of Veterans Affairs (VA) guarantees to a lender if a borrower defaults on their home loan. This guarantee encourages lenders to offer advantageous terms, such as no down payment for eligible borrowers with full entitlement. Entitlement is not the loan amount itself but rather the portion of the loan the VA promises to cover.

Each eligible veteran has entitlement, typically divided into basic and bonus (or second-tier) entitlement. Basic entitlement is generally $36,000. For loans exceeding this amount, bonus entitlement applies, with the VA guaranteeing up to 25% of the loan amount. When a VA loan is used, a portion of this entitlement is consumed, affecting the amount available for future loans. Lenders also consider county loan limits, which represent the maximum amount the VA will guarantee without a down payment in a specific area.

Restoring VA Loan Entitlement

Full restoration of VA loan entitlement allows an individual to use their benefit again, often enabling another no-down-payment purchase. The most common scenario involves selling the home and fully paying off the VA mortgage. Once settled, the entitlement tied to that property is restored.

Restoration also occurs if the VA loan is refinanced into a non-VA loan and paid in full. In rare cases, if another qualified veteran assumes the existing VA loan and substitutes their entitlement, the original borrower’s entitlement can be restored.

A unique one-time restoration option is available if the original VA loan is paid off but the property is not sold, allowing the veteran to keep the property while regaining entitlement. To initiate restoration, individuals submit VA Form 26-1880, a Request for a Certificate of Eligibility (COE), with documentation like proof of loan payoff or property sale.

Using Remaining Entitlement

Even without full restoration, another VA loan may be possible using “remaining entitlement,” also known as second-tier entitlement. This applies when a veteran did not use their full entitlement on a prior VA loan. If a veteran purchased a home for less than their maximum eligibility, the unused portion can be applied to a subsequent purchase.

Remaining entitlement can be used for a second home, even while the first VA loan is active and in good standing. The calculation subtracts entitlement already used from the total available based on current county loan limits. For example, if a veteran used $50,000 of entitlement on a previous loan and the maximum entitlement for their area is $201,625, they would have $151,625 in remaining entitlement for a new loan, which could support a loan of up to $606,500 without a down payment. This option is relevant for active service members with Permanent Change of Station (PCS) orders who need to purchase a new primary residence while retaining their previous home.

Applying for a Second VA Loan

Once entitlement status is confirmed, applying for a second VA loan largely mirrors the initial application. The first step involves obtaining an updated Certificate of Eligibility (COE), reflecting current entitlement status. This document proves eligibility and is requested by submitting VA Form 26-1880.

After securing the COE, find a VA-approved lender experienced with repeat VA loan users. The lender will conduct a standard loan application process, including assessing creditworthiness, income verification, and property appraisal. While the VA guarantees a portion of the loan, lenders have their own qualifying standards for income, credit scores, and debt-to-income ratios. A VA funding fee, which helps offset program costs, is typically required and can be higher for subsequent uses, unless an exemption applies due to service-connected disability.