Can You Have Two VA Loans at the Same Time?
Learn how eligible veterans can strategically utilize their VA loan benefits to finance multiple homes.
VA home loans offer significant benefits to eligible service members, veterans, and certain surviving spouses, providing a pathway to homeownership with favorable terms. It is possible to secure more than one VA loan simultaneously under specific circumstances. This flexibility allows qualifying individuals to adapt to changing life events, such as relocation for military orders, while continuing to leverage their earned benefits.
Understanding VA Loan Entitlement
Central to obtaining multiple VA loans is VA loan entitlement. This entitlement is the amount the Department of Veterans Affairs guarantees on a loan, reducing risk for lenders and often allowing for no down payment. Your Certificate of Eligibility (COE) details your specific entitlement status.
Entitlement has two main components: basic and bonus. Basic entitlement is typically $36,000 for loans up to $144,000. For loans exceeding $144,000, bonus entitlement becomes applicable, covering 25% of the loan amount up to the conforming loan limit for the specific county. When you use a VA loan, a portion of your entitlement becomes “tied up” with that existing mortgage. If you obtain a VA loan, the VA generally guarantees 25% of the loan amount, and that portion of your entitlement is considered used.
The amount of available entitlement directly influences the maximum loan amount a veteran can qualify for without a down payment. If a borrower has full entitlement (meaning they have never used a VA loan or their previous VA loans are fully paid off and the property sold), there is technically no VA loan limit. Most lenders align their maximum loan amounts with conforming loan limits, which vary by county. If you have remaining entitlement, the VA’s guarantee is based on the county loan limit minus the entitlement already used, directly impacting your borrowing capacity for a subsequent loan.
Conditions for Obtaining a Second VA Loan
Obtaining a second VA loan depends on meeting specific conditions related to your entitlement and occupancy. A common scenario involves utilizing “remaining entitlement” while still owning a home financed with an existing VA loan. This is possible if you did not use your full entitlement on your initial VA loan, or if the loan amount was below the conforming loan limits, leaving a portion of your entitlement available.
A crucial requirement for any new VA loan, including a second one, is that the property must be intended as your primary residence. This means you must plan to occupy the home purchased with the second VA loan within a reasonable timeframe, generally 60 days after closing, though exceptions exist for active-duty service members or those awaiting retirement.
Another pathway to a second VA loan involves the “restoration of entitlement.” Full restoration occurs when the home financed with the first VA loan is sold, and the loan is paid off in full. Refinancing the first VA loan into a non-VA loan, such as a conventional mortgage, also frees up the entitlement. This process allows a veteran to regain their full entitlement, effectively resetting their ability to use the VA loan benefit as if for the first time, including the no-down-payment option regardless of loan amount.
A unique option is “one-time restoration” of entitlement. This allows a veteran to restore their entitlement for a new VA loan without selling the original home, provided the first VA loan has been paid off in full. This can be achieved by paying off the mortgage entirely or by refinancing it into a non-VA loan. This specific benefit can only be used once in a veteran’s lifetime, offering flexibility for situations like retaining a property as a rental or vacation home while purchasing a new primary residence.
Beyond these entitlement-specific conditions, all standard VA loan eligibility requirements, including service history, creditworthiness, and sufficient income to support the mortgage payments, apply to a second VA loan.
The Process for a Second VA Loan
Initiating the process for a second VA loan begins with obtaining an updated Certificate of Eligibility (COE). An updated version is necessary to reflect your current entitlement status, whether it’s remaining or restored. You can typically secure an updated COE through the VA’s eBenefits portal, by submitting VA Form 26-1880, or by having your chosen VA-approved lender assist you.
Selecting a VA-approved lender experienced with multiple entitlement scenarios is an important step. Working with one familiar with the nuances of remaining or restored entitlement can streamline the application and ensure proper calculation of your eligible loan amount.
The application process for a second VA loan largely mirrors that of a first, involving a comprehensive review of your financial standing. You will typically need to provide documentation such as proof of income, details of your assets, and a review of your credit history. The lender will use your updated COE to verify your entitlement and determine the maximum loan amount for which you qualify, taking into account any remaining entitlement and current conforming loan limits. The property intended for purchase with the second VA loan must also meet the Department of Veterans Affairs’ minimum property requirements (MPRs) and pass a VA appraisal.