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Can I have 2 VA Loans?

By: Grant Moon 10/15/12 10:47 pm

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Can I have 2 VA Loans?

 

Most veterans know that they can use their VA entitlement over and over again but there are some who qualify for a VA loan but don’t pull the trigger because they don’t want to “use up” their entitlement and want to wait for the perfect time to use this special VA benefit.  But in fact a qualifying veteran or service member can use a VA loan again and again, as long as the previous VA loan is retired either by way of refinancing the VA loan into another loan type or by selling the property and paying off the outstanding VA loan balance.  And that’s true. But there’s also a quirk when it comes to having multiple VA loans and it comes in the form of available entitlement.

When a veteran applies for a VA loan one of the first things that is done is obtaining the Certificate of Eligibility. This certificate will certify that the applicant is in fact eligible (or not) for a VA loan and will also list the available VA entitlement.  This entitlement is currently $36,000 per borrower. The VA will guarantee four times that amount to the lender, or $144,000 in most areas and also represent no more than 25 percent of the final VA loan amount.

But there are instances of using “remaining” entitlement where the borrower uses part of his entitlement and leaves some still remaining.  This is common and available to the veteran who has remaining entitlement. This is how it works:

The borrower used $100,000 of entitlement on a home loan a few years ago and does not want to sell it but buy another using his remaining eligibility.  The sales price of his new home is $200,000 and the county loan limit is $625,500.  Multiply the maximum loan limit of $625,500 X 25% = $156,375 to get the maximum guaranty for the county.  Now subtract the entitlement previously used from the $156,375 new guaranty and the result is $156,375 – $100,000 = $56,375.  By multiplying that number X 4 the new maximum VA loan limit is $56,375 X 4 = $225,000.  Because the sales price of $200,000 is less than the maximum guarantee, the borrower can use their remaining entitlement for a zero down VA mortgage!

Using your remaining entitlement are often only known by those that specialize in VA Loans. So, while some lenders may say no be sure that you check with a lender that is experienced in VA Loans.

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