Wondering how many times you can take advantage of a VA home loan? Well, the good news is that there is no limit to the number of VA home loans you can obtain. Unlike some other loan programs, the VA loan benefit is reusable, allowing veterans and service members to utilize their VA home loan benefit multiple times throughout their lives.
1. Primary Entitlement:
The VA home loan program provides eligible veterans and service members with a primary entitlement, which is the amount of loan guarantee the VA offers to the lender on your behalf. For most eligible borrowers, the primary entitlement is $36,000. This amount can go a long way in securing a VA home loan, as it represents 25% of the maximum loan amount that the VA can guarantee, currently set at $144,000.
If you’ve used your primary entitlement to obtain a VA loan, you can still get another VA loan as long as the previous loan has been paid off. Once your existing VA loan is paid off, your primary entitlement is restored, allowing you to use it again for a new VA loan.
2. Second-Tier Entitlement:
If you’ve fully paid off your previous VA loan but want to obtain another VA loan while keeping the original property, you can tap into your second-tier entitlement. The second-tier entitlement represents the remaining loan guarantee the VA offers beyond the primary entitlement. The amount of second-tier entitlement is calculated based on the county loan limits set by the Federal Housing Finance Agency (FHFA), which vary by location.
The second-tier entitlement allows you to borrow up to $144,000 or even higher, depending on the FHFA loan limits in your county. This additional entitlement can be used to finance a new home purchase before selling or refinancing your existing VA loan, making it possible for veterans to own multiple properties through VA financing.
3. Restoration of Entitlement:
If you’ve previously utilized your VA home loan benefit but wish to sell your property and pay off the loan, it’s important to note that you can restore your entitlement. Once you’ve sold your home and paid off the previous VA loan in full, your entitlement can be restored, allowing you to obtain a new VA loan.
This restoration of entitlement is especially useful for veterans and service members who frequently relocate or find themselves in a position to upgrade to a larger home. By using their VA loan benefit wisely and paying off their loans, they can continually access the benefits of the program throughout their lives.
4. Refinancing with a VA Loan:
In addition to using your VA loan benefit for the purchase of a new home, you can also refinance an existing non-VA loan or VA loan into a VA-backed loan. This means that if you have an outstanding conventional or FHA loan, you can refinance it using a VA loan and continue to enjoy the advantages of VA financing.
While refinancing doesn’t grant you a new entitlement, it does reuse your original entitlement. Refinancing can be an excellent option to lower your interest rate, secure a more manageable monthly payment, or eliminate private mortgage insurance (PMI) if you’re switching from a non-VA loan.
5. Eligibility and Loan Limits:
It’s imperative to mention that while there is no limit to the number of VA loans you can obtain, there are specific eligibility criteria and loan limits that determine your ability to secure a VA loan. Some key points to consider include:
- Eligibility requirements: You must meet the minimum service requirements, including a certain length of active-duty service depending on your era of service.
- Certificate of Eligibility (COE): Before obtaining a VA loan, you’ll need to obtain a COE, which verifies your eligibility for the program.
- Loan limits: The loan amount you can borrow without a down payment may be limited by county loan limits set by the FHFA, although VA loans allow for higher loan amounts with down payment requirements.
| Number of VA Loans | Entitlement Amount | Loan Amount Eligibility (No Down Payment) |
|---|---|---|
| 1st Loan | $36,000 | $144,000 |
| 2nd Loan (With Restoration of Entitlement) | $36,000 | $144,000+ |
| 3rd Loan and Beyond (Utilizing Second-Tier Entitlement) | Varies based on county loan limits | $144,000+ |
By understanding the nuances of your VA loan entitlement and keeping up with the eligibility and loan limits, you can make informed decisions about how many times you can get a VA home loan and maximize the benefits of this valuable program.
In conclusion, veterans and service members have the opportunity to take advantage of the VA home loan benefit multiple times, with no set limit on the number of loans. Whether you’re utilizing your primary entitlement, second-tier entitlement, or restoring your entitlement after paying off a loan, the VA loan program provides flexibility and opportunities for homeownership throughout your life.