If you are a veteran or an active duty service member looking to buy a home, you may be wondering how many times you can use your VA home loan. The good news is that there is no limit to the number of times you can use this benefit. As long as you meet the eligibility requirements and have enough remaining entitlement, you can use your VA home loan multiple times throughout your lifetime.
1. Initial Entitlement
When you first become eligible for a VA home loan, you are typically granted an initial entitlement of $36,000. This initial entitlement is what allows you to purchase a home with no down payment. However, the guarantee from the Department of Veterans Affairs usually covers up to 25% of the loan amount, which means you can potentially buy a home valued at up to $144,000 without a down payment.
It’s important to note that the $36,000 is not a limit on the loan amount you can borrow. Instead, it represents the maximum guarantee that the VA will provide to the lender in case of default. If you want to buy a more expensive home, you will need to make a down payment on the portion of the loan that exceeds the $36,000 initial entitlement.
2. Remaining Entitlement
Every time you use your VA home loan, your entitlement is reduced by the amount of the loan guarantee provided to the lender. However, if you sell your home and pay off the loan in full, your entitlement will be fully restored, and you can use your VA home loan again. This is known as your remaining entitlement.
Your remaining entitlement is the portion of your initial entitlement that you haven’t used yet. For example, if you used $100,000 of your initial $36,000 entitlement on your first home, you would have $136,000 of remaining entitlement available for future use.
3. Entitlement Restoration
If you have used your VA home loan in the past and want to purchase another home, you may be eligible to have your entitlement restored. There are a few scenarios where restoration is possible:
- Selling the property and paying off the previous VA loan in full
- Transferring your VA loan to another eligible veteran
- Paying off the VA loan and obtaining a Release of Liability from the VA
If you meet any of these conditions, you can apply to have your entitlement restored. Once restored, you can use your VA home loan benefits again to purchase another home.
4. Using Second-Tier Entitlement
If you have used your entire initial entitlement and your remaining entitlement is not enough to purchase another home, you may still be able to use a second-tier entitlement. The second-tier entitlement is available to veterans who have used their entire initial entitlement and have not had it restored. With second-tier entitlement, you can obtain a VA home loan without needing a down payment, even if you do not have any remaining entitlement.
5. Using a Joint VA Loan
If you are purchasing a home with another eligible veteran, you can use a joint VA loan. With a joint VA loan, both veterans’ entitlements are combined, allowing for a higher loan amount and potentially avoiding the need for a down payment. This can be a great option if you and another veteran want to buy a home together using your VA home loan benefits.
In conclusion, the VA home loan benefit can be used multiple times throughout your lifetime, as long as you meet the eligibility requirements and have enough remaining entitlement. Your entitlement can be restored, and you can even use second-tier entitlement or a joint VA loan if necessary. Take advantage of this valuable benefit to achieve your homeownership goals.