Whether it’s more bedrooms, extra storage space, or even a yard for the kids to play in, eventually the house that seemed to comfortably accommodate two newlywed adults starts to feel unbelievably small, thus beginning the search for that new “perfect” home.
This endeavor, often referred to as “moving up,” can bring its challenges as families are trying to save for the down payment traditionally required in the home-buying process.
Fortunately, one of the biggest perks of the Veterans Affairs home loan program is that eligible veterans and service members can purchase a home without a down payment. This means that service members and veterans can avoid this common hurdle in homeownership.
What’s a VA Loan?
A VA loan enables veterans, active-duty service members, and their surviving spouses to purchase, build, or improve a home. It is a mortgage loan backed by the U.S. Department of Veterans Affairs (VA).
The benefits are incredible: no down payment, no PMI, and often lower interest rates than those of a conventional loan. Many veterans mistakenly assume it’s a one-time benefit, but in reality, it can be used multiple times throughout your life.
Can a VA Loan Be Used More Than Once?
Absolutely. You may use a VA loan once, twice, three times, or even seven times. But for that, you need to have leftover entitlement.
Some of our clients have even used their VA loan nine times. If you’re wondering whether you still have entitlement left, a seasoned loan expert can review your status and help you take the next step toward your new home.
What Is Entitlement and How To Use It?
The ability to use your VA Loan twice or more is based on entitlement. VA Loan entitlement applies to veterans and active military personnel who meet the program’s service criteria.
Entitlement is the amount the VA promises to repay the lender if you default on the loan, and it’s what enables lenders to offer favorable terms with little risk.
All those who qualify have two types of entitlements: basic and bonus entitlement. Whenever a Veteran buys a home, they apply some degree of entitlement against the loan amount.
The VA generally provides a guarantee of one-fourth of the loan value, which means borrowers will generally use one-fourth of their available entitlement.
Entitlement can be a troublesome concept to grasp and confounds those in the mortgage industry.
The point is that if you are currently a VA homeowner and want to “move up” the ladder of homeownership, you might be able to do so without having to sell your home.
Can I Use My VA Loan Benefits More Than Once?
Yes, a VA loan can be used one, two, three, or even seven times. There is no limit. You can always get another VA loan if you have leftover entitlement.
We are one of the best VA home loan lenders. Our trusted home loan professional can assess your position and guide you through your future home purchase.
Restoring Entitlement After Selling
VA borrowers usually choose to sell their present property rather than keep it. Buyers are generally unconcerned about any remaining entitlement amounts in these cases.
This is because veterans who sell their homes and pay off their mortgages in full may be eligible to regain their full entitlements.
For example, suppose you bought a house for $225,000. The VA guarantees only a fourth of the loan, making the VA entitlement to be approximately $56,250.
If you sell that property and fully repay the mortgage, you can apply to have that entitlement restored.
Once that process is complete, you can use your restored entitlement to purchase a new home—again, often without putting any money down.
Can You Have Multiple VA Loans at Once?
Yes, you can have more than one VA loan at the same time, but there’s a catch. You need enough remaining entitlement, and you must live in one of the homes as your primary residence (VA loans are for primary homes only).
For example, if your total entitlement is $112,500 and you’ve used $56,250 on your first home, you have $56,250 left to use for another loan up to $225,000.
This often comes up for active-duty service members who get Permanent Change of Station (PCS) orders. Instead of selling their current home, they might rent it out and use their remaining entitlement to buy a new home at their next duty station. It’s an exceptionally smart way to build wealth even while you are serving!
FAQs:
- What is a VA loan?
A VA loan is a mortgage guaranteed by the VA, helping veterans, service members, and spouses buy homes with no down payment and no PMI. - How does a VA loan work?
Private lenders provide the loan, but the VA backs it, reducing risk. You get better terms, like no down payment. You’ll need a Certificate of Eligibility. - Home improvement loans for veterans?
VA loans can cover improvements via cash-out refinances or new purchase loans. Disabled veterans may qualify for Specially Adapted Housing grants. - Who offers VA construction loans?
Lenders like Veterans United and Navy Federal offer VA construction loans to build custom homes with VA benefits. - Can you use a VA loan to build a house?
Yes! VA construction loans let you finance building a home, converting to a permanent mortgage once completed. - Can VA loans be used to buy land?
Yes, if you plan to build a home on it within about a year. The land must be buildable and meet VA requirements.
Wrapping It Up
Using your Veterans Affairs home loan more than once is like having a secret weapon in the homebuying world. Whether you’re upgrading to a bigger home, moving to a new duty station, or even building wealth with rental properties, the VA loan can make it happen.
The key is managing your entitlement and working with a lender who gets it. Lenders can guide you every step of the way.
You’ve earned this benefit through your service, so don’t let it go to waste! If you’re unsure where to start, reach out to the VA or a trusted lender for personalized advice.