Yes, it is possible to use the VA home loan more than once. The Department of Veterans Affairs (VA) offers this benefit to eligible veterans, active-duty service members, and surviving spouses. This loan program provides an affordable way for servicemembers to become homeowners.
1. Understanding the VA Home Loan Entitlement
The VA home loan entitlement is the amount that the VA will guarantee for each eligible borrower. This entitlement is typically 25% of the loan amount, up to the loan limit set by the VA. When a borrower uses their VA home loan, the entitlement is tied up in that property until the loan is paid off or the property is sold.
The good news is that once a VA loan is paid off, the entitlement can be restored and used again for another VA home loan. This means that if you sell your previous VA-financed property or pay off the existing loan, you can use your entitlement to purchase another home.
2. Restoring Entitlement After Paying Off a VA Loan
If you have paid off your VA loan and wish to use your entitlement again, you will need to request a restoration of your entitlement from the VA. Once your entitlement is restored, you can apply for a new VA home loan.
Here are the general steps to restore your entitlement:
- Obtain a Certificate of Eligibility (COE) from the VA website or through your lender.
- Submit the necessary documents to the VA, including proof of previous VA loan payoff.
- Wait for the VA to process your request and restore your entitlement.
It’s important to note that the restoration process may take some time, so it’s advisable to start the process well in advance if you’re planning to use your entitlement again.
3. Using Remaining Entitlement to Purchase Another Home
Even if you haven’t paid off your previous VA loan, you may still be eligible to use your remaining entitlement to purchase another home. If the new loan amount is within the limits set by the VA and you have enough remaining entitlement, you can apply for a subsequent VA home loan.
It’s important to understand that using your remaining entitlement while still having an outstanding VA loan may impact the amount you can borrow for the new loan. The VA will calculate your entitlement available by considering the remaining portion of your entitlement tied up in the existing loan.
4. Utilizing Bonus Entitlement to Get a Second VA Loan
If you have used your full entitlement on a previous VA loan and wish to purchase another home before paying off the existing loan, you may be able to utilize bonus entitlement. Bonus entitlement allows eligible borrowers to borrow above the standard VA loan limit without making a down payment.
In order to qualify for bonus entitlement, you need to meet certain eligibility requirements, such as your loan amount being above the standard VA loan limit for the county where you’re looking to purchase a home.
To determine if you qualify for bonus entitlement and to discuss your options, it is advisable to consult with a VA-approved lender who can guide you through the process.
5. Refinancing a VA Loan to Use Your Entitlement Again
If you already have a VA loan and wish to use your entitlement for another home, you may consider refinancing your current VA loan. By refinancing, you can free up your entitlement and use it towards the purchase of a new home.
There are various refinancing options available for VA loans, including the VA Interest Rate Reduction Refinance Loan (IRRRL) and the VA Cash-Out Refinance Loan. These options allow you to refinance your existing VA loan with minimal documentation and potentially lower your interest rate or borrow additional cash.
In conclusion, the VA home loan can be used more than once. Whether you have paid off your previous VA loan or still have an outstanding loan, you have options to use your entitlement for another home purchase. However, it is essential to understand the eligibility requirements and process involved in using your VA home loan multiple times. Consulting with a VA-approved lender will provide you with accurate information and guidance to make informed decisions.