Your entitlement amount, listed on your certificate of eligibility, determines the maximum VA loan amount. Today, that entitlement amount is $36,000 and the guarantee applies to four times that to arrive at a loan amount. If you’ve never used your VA home loan benefit before, the entitlement applies to loans up to $144,000. Changes over the years have gradually adjusted the maximum loan amount and the VA will guarantee 25 percent of a loan amount up to $417,000, higher in areas deemed “high cost.”
Partial entitlement means you used part of your entitlement and not all of it and your loan amount at the time of its use was less than the $144,000 amount. Say you bought a home for $100,000. The VA will guarantee 25 percent of that, or $25,000. That $25,000 is subtracted from the initial $36,000 leaving $11,000 still available. Granted, that would mean a sales price of four times $11,000, or $44,000, rather small for a home, but that’s what is called partial entitlement.
To restore your entitlement to the original $36,000, you must sell the home and the buyers provide their own financing or pay cash or you can refinance out of the VA loan into another loan type. In either instance, your entitlement is restored for you to use yet again.