How Many Times Can You Use A Va Loan?
by Arnab Dey Loans & Credit 02 August 2023
How many times can you use a VA loan is a frequently asked question. VA home loans are a rightfully earned benefit that can be used for a lifetime! Veterans can use their VA loan benefit as many times as desired if they have remaining entitlement. Moreover, Veterans Affairs does limit the amount of liability it assumes.
It usually affects the amount of money a VA lender will lend. The amount of VA loan you can obtain depends on your VA loan entitlement at that time. If you have a VA loan and decide to sell your home, then your va loan entitlement gets fully restored as long as your past va loan was completely paid off.
If you don’t sell your old home/first home/current home and decide to rent it out and buy another one, you’ll have entitlement, but it won’t be the same amount, and your VA funding fee might be higher. Furthermore, your new loan amount might require a down payment, or you might have the option for another 100% financed VA home loan.
What Is Entitlement and How Is It Used?
VA loan entitlement is the amount the government guarantees in case of default. Reduced VA loan entitlement can limit your $0 down buying power and require a down payment for a new home.
How Is Va Loan Entitlement Restored On Subsequent Usage?
Your VA loan entitlement is calculated by subtracting the entitlement you’ve already used from the maximum entitlement amount of $36,000. Your remaining entitlement is the maximum amount the VA will guarantee on your loan. Here’s how to calculate your remaining entitlement:
- Your county’s conforming loan limit, usually $726,200 or the loan amount x 0.25 = total entitlement.
- High-cost areas, the conforming loan amount can go up to $1,089,300. Total entitlement minus entitlement you’re currently using equals remaining entitlement.
- The remaining entitlement multiplied by 4 equals your maximum loan amount. Furthermore, you do not have to put money down.
How Do You Restore Your Eligibility After You Sell Your Home?
Restore Your Va loan eligibility after you sell your home by filling out a Request for a Certificate of Eligibility VA Form 26-1880 and mailing it to the VA regional loan center for your state. If you sell your home for more than is owed, your past va loan is paid off, thus restoring your VA home loan entitlement.
Another option is to allow a well-read Veteran to understand the current loan and also replace their entitlement for theirs. Don’t forget that the VA assumable loan still needs to be qualified for. Refinancing your existing VA loan into a non-VA product such as the FHA loan or conventional loan can invoke what’s known as the “one-time restoration of entitlement.”
How Do I Get My Entitlement Restored After Foreclosure On A Past Va Loan?
It is feasible for veterans to get another VA loan after foreclosure. Normally, veterans will go through a two-year seasoning period before being eligible again. During this period, they can work on rebuilding their credit and finances. At the same time, VA loan borrowers may have a second-tier or bonus entitlement.
It can help them get another VA loan after a foreclosure. However, if the foreclosed home was purchased with a VA-backed mortgage, it can damage their credit score and reduce their VA loan entitlement.
How does VA bonus entitlement work?
To qualify for bonus entitlement, veterans must meet the following requirements:
● They must have served at least 20 years on active duty.
● They must have a good credit score.
● They must be buying a home that costs more than $144,000.
Veterans who meet these requirements can apply for bonus entitlement by submitting a VA Form 26-1880 to the VA. The VA will review the application and determine if the veteran is eligible for bonus entitlement. If the veteran is approved for bonus entitlement, they will receive a Certificate of Eligibility (COE) that shows their bonus entitlement.
Bonus entitlement is a valuable va loan benefit for veterans who want to buy a home that costs more than $144,000. It can help veterans save money on mortgage interest payments and build home equity.
Here are some of the VA loan benefits of bonus entitlement:
● It allows veterans to borrow more than the standard $36,000 entitlement.
● It can help veterans save money on their mortgage interest payments.
● It can help veterans build wealth by building equity.
If you are a veteran who is considering buying a home that costs more than $144,000, you should consider applying for bonus entitlement. It could be a valuable benefit that helps you achieve your homeownership goals.
What Are The Occupancy Rules For The Va Loans When I Want To Rent My Home After A Pcs Transfer From One Base To Another?
VA loans require that the property is occupied as a primary residence within a “reasonable time” after closing. The VA considers 60 days to be a reasonable time, but certain exceptions exist. If you are on active duty and are unable to occupy the property within 60 days, you can still qualify for a VA loan if you meet the following conditions:
● Your certification of occupying the property at a specific date.
● Specific events in the future that will enable you to occupy the property on that date.
For example, if you are on active duty and are scheduled to be transferred to a new duty station in 6 months, you can still qualify for a VA loan and rent out your current home.
You simply need to certify that you will occupy the property when transferred.
If you are a veteran who is not on active duty and you want to rent out your home after a PCS transfer, you will need to meet the following requirements:
● You must have lived in the home for at least 12 months.
● You must have a valid reason for renting out the home, such as a new job in another location.
● You must obtain a Certificate of Eligibility from the VA.
Once you have met all of the requirements, you can rent out your home without any problems.
Additional Considerations
Here are some additional things to keep in mind when renting out your home after a PCS transfer:
● You will still be responsible for paying the property’s mortgage, taxes, and insurance.
● You will need to find a qualified tenant who is willing to sign a lease agreement.
● You will need to maintain the property in good condition.
● You may be required to pay capital gains taxes on any profit you make from renting out the property.
Considering renting out your home after a PCS transfer, carefully weigh the pros and cons. There are a number of factors to consider, such as the cost of renting out the property, the potential for profit, and the amount of time and effort required to manage the property.
Can A Va Loan Be Used For A Second Home?
You can use your VA home loan for a second home, but that home needs to become your primary residence.
Can I Use A Va Loan To Buy A Vacation Home?
No, VA loans are only for a home that will be your primary residence.
Can I Use The Va Home Loan Benefit On An Investment Property?
NO! VA loans require you to occupy the home, and occupancy requirements exist.
What Are The Occupancy Requirements On Va Loans?
The VA loan occupancy requirements require that you must occupy the home as your primary residence within 60 days of closing on the new VA loan. The borrower must also sign a certification statement they intend to attest to. There are some exceptions to this rule. An exception can be granted if the borrower is on active duty military service or relocating for work. Also, a spouse and children can move in to satisfy the requirements while the other spouse finishes service.
What Are The Benefits Of A Va Mortgage Loan?
● No down payment required
● No Mortage insurance
● 4% seller contribution towards closing costs
● According to the Department of Veterans Affairs, “VA home loans often have lower interest rates and closing costs than conventional loans.”
● Less stringent credit score criteria than conventional loans
● Can be used more than once
● VA loan to renovate a home
● Certain costs the seller must pay are known as “non-allowables.”
● It’s possible to have no out-of-pocket closing costs
● There is no limit on VA loans for first-time users, and this makes getting a Jumbo VA loan easier
What Are The Primary Criteria For Va Mortgages?
The VA loan program requires that you must meet one of the following program service requirements:
● Served 90 consecutive days of active service during wartime
● Served 181 days of active service during peacetime
● Served more than six years with the National Guard or Reserves (or 90 days under Title 32 with at least 30 of those days being consecutive)
● You’re the surviving spouse of a service member who died in the line of duty or from a service-related disability
● Other requirements include decent credit (usually 620 or above),
● Stable income to cover your debt-to-income ratio. 41% DTI is usually acceptable
● Steady employment, such as a long-term history of employment and current employment
● The home must be for your occupancy, and you must occupy it
● The property must be a residential dwelling (up to four units) that would appeal to most buyers
● There is no upper limit for acreage, but lenders have their own limits
● The property must qualify and appraise
● The seller must pay certain costs
Va Loan Faqs
● Surviving spouses can have va entitlement
● Service-connected disability can nullify a funding fee
● There is no va loan limit on VA loans set by the Department of veterans affairs on your first va loan, but a mortgage lender decides their limits.
● VA guarantees loans and doesn’t make them.
● A down payment isn’t required but can be needed in cases
● Mortgage insurance isn’t needed, but a funding fee is usually required.
● Active duty service members usually have a Basic allowance for housing BAH that can help them with income qualifications
● VA borrowers can get a VA one time close construction loan, also known as a va construction loan
● Borrowers can get a va renovation loan on a home that they want to buy that needs updates or repairs
Putting The Discussion To A Close
We hope the article has helped you understand the important concepts linked with VA loans. Contact us to know further on this subject.
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