How Many Times Can I Use a VA Loan: Reusing Your VA Loan Benefits

Are you planning to buy a new home? You are wondering whether you can fund the purchase because you have already used a VA loan in the past, right? Well, it is quite a common question that pesters hundreds of active-duty service members and veterans: how many times can you use a VA loan? Here is a simple answer – you can leverage the benefit of your VA loan as many times as you need. You can even have several VA loans at the same time under specific conditions.

Let’s get into the details of repeat VA loans, VA loan entitlements, how you can take out a new VA loan without selling your property, and more.

How Many Times Can You Use a VA Loan

As we already mentioned above, it is possible to have more than one VA loan at the same time. However, you can only use the funds to purchase a primary residence while agreeing to their occupancy requirements. Since you can have only one primary residence at a time, it usually means you can only have one VA loan at a time.

Now, there is an exception to this rule. You can have two VA loans at the same time for two different primary residences. How does that work? If you are moving due to a permanent change of station (PCS) order, you can get two VA loans. The time you are permitted to own both residences is limited. Typically, you will have to set an occupancy date of less than a year after getting the loan.

Here is an example: a veteran can keep one VA-financed property as a rental (after PCS or relocation) and then buy a second primary residence using the remaining entitlement.

To be precise, VA rules keep you from simply purchasing a second home as a financial or lifestyle choice. If, however, your military service makes it difficult to move without owning two homes for a time, that is a different story.

Here is one more thing you should be aware of: there is no maximum or limit on the number of times you can get a VA loan. You can use the loan an unlimited number of times. As long as you have remaining entitlement, you typically always have the option to obtain another VA loan.

What is a VA Loan Entitlement

VA loan entitlement means the amount of your loan that the VA will guarantee. It does not have anything to do with the entire loan amount. In simple words, it is how much the VA will pay the VA mortgage broker in California or lender if you default on the loan. If you are eligible for a full VA loan entitlement, it usually means you do not have to make a down payment.

Understanding VA loan entitlements is important for all VA loan borrowers, but it is especially relevant to individuals with PCS orders who are considering buying a second home before selling their first.

The Working Process of VA Loan Entitlements

So, how many times can you use a VA loan? If you are eligible to obtain one but do not currently hold it, you will typically have what is known as “full entitlement.”

For a loan less than $144,000, the VA will guarantee up to $36,000. This is sometimes referred to as your basic entitlement. Yes, it may be a challenge to find a home at this price point, but the VA also guarantees up to 25% of the borrowed amount for a loan exceeding $144,000. This is called a “bonus entitlement” or “second-tier entitlement.” At the moment, there are no VA loan limits California capping the amount the VA will pay 25% on. Your lender will determine what you can afford and approve you for that amount.

There is a downside to this approach. If you already have some of your entitlement tied up in a VA loan that you are currently paying off, or if you have defaulted on an older VA loan, your entitlement amount will be cut short. This limits how much you can take out without putting down your own money.

Figuring Out How Much Entitlement You Have Left

To determine the amount of entitlement you have left, you or your VA mortgage broker in California must request a Certificate of Eligibility (COE) from the official website of the U.S. Department of Veterans Affairs. The COE will show whether your entitlement is full or partial, and it will also list any VA loans currently charged against entitlement.

This formula will help you calculate how much entitlement you have left while you still hold another VA loan:

The result from this equation is the amount of entitlement you have remaining.

If you want to find out how much you can borrow without making a down payment, simply multiply your remaining entitlement by four. You may need to budget for a down payment if the size of the loan you want to borrow exceeds this amount.

How to Take Out a New VA Loan Without Selling Your House

You can obtain a new VA loan without selling your current property. We have already covered the details concerning the ability to get new consecutive VA loans and how they remain beneficial for life.

Just remember that the new loan cannot be for an investment property or second home. VA loans need to be used for your primary residence only. Any new or next home you buy with a VA mortgage must be your primary residence. You will need to designate your current/previous home as an investment property or second home.

You will also need to apply for a restoration of entitlement, since the entitlement is generally restored when you sell your current property. Restoration of entitlement is the process of getting the amount of your used entitlement back so you can use your full VA benefits once more to buy a new home. However, this type of restoration is usually only available once.

Let’s recapitulate the whole thing. If you want to take out a new VA loan without selling your house, you will need to:

• Pay off your existing VA loan to become eligible for a new one.
• Have sufficient remaining entitlement to cover the guarantee requirement for the new loan.
• Meet the primary residence occupancy requirement and VA loan inspection requirements.
• Designate the property you are moving out of as an investment property or second home.
• Not be in default on your prior VA loan.

Apply for a one-time restoration of entitlement when you sell your current home or for a subsequent use with remaining entitlement if your entitlement is tied up in the previous home.

An Exclusive Situation

What if you have not paid off your VA loan but want another home? Just because your current property is not paid off does not mean you have run out of options.

Do you want to turn your existing primary residence into an investment property and buy another home with a VA loan? It is perfectly possible! Just refinance your current primary residence into a conventional loan and restore your entitlement that way. After that, you can use a VA loan for your new primary residence while renting out the property you resided in previously. If you go down this road, you may be able to apply for a restoration of entitlement if you have paid off the property but have not sold it yet.

Final Thoughts

How many times can you use a VA loan? Multiple times, actually! You do not just enjoy the perks of VA loans several times, but you can also hold more than one VA loan at a time. Of course, for that to happen, you must meet specific requirements. For example, you need enough remaining entitlement, and you need to occupy the new home as your primary residence.

While there is no official limit on the number of times you can use a VA loan, you need to understand your entitlement and follow the rules of VA occupancy. They are key to securing a new loan. This is especially true if you plan to keep your current property or convert it into a rental. But if you are planning to own two homes simultaneously due to a PCS order, or if you want to purchase an investment property, things can get a little more complicated.

In any case, if you are eager to apply for a VA loan, ALT Financial Network, Inc. can get you sorted.

FAQs

1. Does using a VA loan multiple times affect your VA funding fee?

Yes. The VA funding fee typically increases for subsequent uses of the benefit. The exact percentage depends on your down payment amount and service category, unless you qualify for an exemption.

2. Can you transfer your VA loan benefit to someone else?

No. VA loan benefits are tied to your military service and eligibility. While a VA loan may be assumable, your entitlement remains linked to your record unless properly restored.

3. What happens to your entitlement after foreclosure on a VA loan?

If foreclosure occurs, the VA may reduce your entitlement by the amount paid to the lender. Restoring full entitlement often requires repaying the loss or resolving the deficiency.

4. Can both spouses use their VA loan benefits at the same time?

If both spouses are eligible veterans, they may combine or use separate entitlements under certain conditions. Lender approval and occupancy rules still apply to each loan.

5. Does credit score impact repeat use of a VA loan?

Yes. While the VA sets no minimum credit score, lenders usually require qualifying credit standards. Repeat use still requires meeting income, debt, and underwriting guidelines for approval.