How Many Times Can You Use A VA Loan?

VA loans were designed to provide affordable mortgage and housing options for veterans, active-duty service members, qualified reservists, eligible National Guard personnel and qualifying surviving spouses. If you fit into one or more of these categories, great! Let’s look at what a VA loan is, who can get one, and how many times you can use one. We’ll also look at what a VA entitlement is, and how to use it.

Who Can Get A VA Loan?

VA loans are a type of home loan backed by the Department of Veterans Affairs (VA). Though they’re backed by the government, the loans are offered through banks and mortgage companies. VA loans are designed to offer benefits such as lower interest rates, no primary mortgage insurance and no required down payment.

VA loans are offered to eligible veterans, active-duty service members, qualifying members of the National Guard and qualifying surviving spouses. As with any loan, there are eligibility requirements, both from the government and your lender.

On the government side, you need to meet a minimum of ONE of the following criteria:

• A minimum of 181 days of active service during peacetime.
• At least 90 consecutive days of active service during wartime.
• More than 6 years of service with the National Guard or Reserves or 90 days under Title 32 with at least 30 consecutive days.
• You’re the spouse of a service member who lost their life either in the line of duty or as the result of a service-related disability. Generally, surviving spouses may not be remarried.

If you’ve been discharged as a result of a service-connected disability, minimum service time requirements don’t apply.

How do you show you’re eligible for a VA loan? Your certificate of eligibility takes care of this.  A certificate of eligibility, or COE, is a form provided by the VA that shows your lender that you meet the criteria for a VA loan. The COE provides an entitlement code that shows your lender your military service and allows them to determine if you’ll pay the VA funding fee. This is a fee paid to the VA, which helps fund other VA loans.

If you don’t have your COE, but have your service documentation available to you, Rocket Mortgage^® can help you obtain it.

In addition to the government requirements, each lender will have VA loan credit score and income requirements for their borrowers.

Can I Use A VA Loan More Than Once?

Yes! There’s no limit to how many times you can use your VA loan benefit over your lifetime if you still meet the requirements of the VA and your lender. Your VA entitlement determines how much of your loan the VA will guarantee. We’ll look at that later.

Most of the time, your VA loan must be for either a purchase or refinance of your primary residence, so, for example, you wouldn’t be able to use it to buy a vacation home.

For eligible borrowers who qualify with an approved lender, there’s no limit as to how many times you can use your VA loan benefit in your lifetime. In some situations, it may even be possible to have more than one VA loan at a time, as we’ll cover next.

How Many VA Loans Can You Have? 

A VA loan may be used for your primary residence only. You can use a VA loan to buy a home or to refinance your current home, but it must be designated as the place you live for most of the year.  

When You Might Need A Second VA Loan

There are a few situations where you might need a second VA loan:

• If you’re a service member who receives permanent change of station (PCS) orders and you have to move to a new duty station. This would allow you to have two primary residences.
• If you’re a previous VA loan borrowers who lost your home due to foreclosure, you can still use your VA benefit again after waiting a certain amount of time after your foreclosure. This is usually two years. However, if you’re in financial hardship, you may qualify for financing sooner. Each lender’s guidelines may be different.
• A VA loan assumption can restore your VA loan entitlement to full. An assumption means that someone else takes over your loan, assuming the interest rate, monthly payments and loan balance. This person must meet VA loan requirements themselves and be willing to transfer their own VA loan benefits, so your entitlement is restored.
• You can apply to have your VA loan entitlement restored in full once if you pay off your VA loan, but don’t sell your home. This would allow you to purchase another home with a VA loan to be your primary residence, while keeping the other property to serve as a vacation home or rental property.

Understanding The VA Loan Entitlement

Your VA loan entitlement is the amount the VA is willing to pay your lender if you default on your loan. It’s generally 25% of your loan amount.

Your COE has an entitlement code, which shows your lender how you earned your entitlement. It’ll also show your basic entitlement amount of $36,000. The 25% rule means that if your basic entitlement amount is $36,000, the VA will guarantee 25% of a loan up to $144,000.

This doesn’t mean your loan amount has to be $144,000 or less. It can be higher, and it just means you’ll use your bonus entitlement. However, your lender will have their own qualifications for you to meet to determine your loan amount. With limited exceptions below, the VA doesn’t set loan limits of its own.

Bonus entitlement kicks in when your loan is over $144,000. If you have full entitlement, the VA will cover 25% of your loan amount, even if it’s more than $144,000. If you’ve got reduced entitlement because you’ve already used some of it, the VA will guarantee up to 25% of your county’s conforming loan limit. The conforming loan limit is the maximum dollar amount of a mortgage that Fannie Mae or Freddie Mac would guarantee if this was a conforming loan.

Using Your Full Entitlement

If you’ve got your full entitlement to use, great! This indicates that either you’re a first-time VA loan user, or you’ve fully paid off a previous VA loan. This means you have that full $36,000 entitlement amount. Because there’s no limit on how many times you can use your VA loan benefit, each time you pay off a VA loan, that $36,000 is restored.

Using Partial Entitlement

You can still use your partial, or reduced, entitlement to take out another VA loan. Your entitlement is reduced if you currently have a VA loan that you’re still paying back, if you’ve paid your loan in full but still own the home you used a previous VA loan to buy and haven’t applied for entitlement restoration, or if you’ve defaulted on a previous VA loan. Your COE will show your reduced entitlement.

If you have partial entitlement, the VA will guarantee the lesser of the following:

• 25% of the loan amount
• 25% of the county conforming loan limit minus any entitlement used that hasn’t been restored

Using a partial entitlement means the VA will only guarantee your loan up to that conforming loan limit, minus the entitlement you’re using in your current situation. You can still borrow more than your entitlement (again, based on your lender’s qualifications), but you’ll likely have a down payment to make up the difference.

Calculating Your Entitlement

Let’s look at how to calculate your remaining VA entitlement:

• Multiply your original loan amount by 0.25. This equals the entitlement you’ve already used. For example, let’s say your original loan amount was $300,000.
  Entitlement you’ve used: 300,000 x 0.25 = $75,000
• Look at your county’s conforming loan limit. The maximum entitlement amount is 25% of the county conforming loan limit. For most of the country, the limit in 2022 is $726,200. It’s higher in high-cost areas. Let’s say you live in a county where the limit is $647,200.
  Maximum entitlement: 726,200 x 0.25 = $181,550 
• Now, to calculate your remaining VA entitlement, you’ll take the maximum entitlement and subtract the entitlement you’ve already used. This will give you the amount the VA will guarantee on your new loan without you having to make a down payment. 
  Your remaining entitlement: 181,550 -75,000 = $106,550

Now that you’ve calculated your remaining entitlement, you can calculate the loan amount the VA will guarantee with no down payment. You’ll multiply your remaining entitlement by 4, so with our example numbers, this would be 106,550 x 4 = $426,200. This is the maximum amount you can borrow with no down payment.  

We know there’s a lot of math here, so you can always rely on our Home Loan Experts to walk through your situation.

How To Get A Second VA Loan

Looking to get a second VA loan, but aren’t receiving PCS orders that would allow you to have two primary residences? There are a few ways you can get another VA loan:

• Pay off your existing VA loan first. You can apply to restore your entitlement to full! Remember, you can only do this once. You’ll be able to use that full entitlement on your next VA loan.
• Refinance to a non-VA loan. This is helpful if you’re looking to keep a property as a second home or investment property, so you can free up your VA loan benefits to use on a primary residence.
• Wait 2 years after a foreclosure on a VA loan. You’ll lose the entitlement that you used in the foreclosed property, but you can use the remaining entitlement for a new VA loan. To restore your entitlement to full, you’ll need to repay the VA in full.

The Bottom Line

VA loans are an excellent benefit for veterans, active-duty service members and qualifying spouses to use for affordable mortgage and housing options. You can use this benefit as many times as you want during your lifetime! Interested in and meet the qualifications for a VA loan? Apply for a VA loan today or give us a call at (888) 452-0335.