How Many Times Can You Use A VA Loan?

A Veteran Affairs Loan, commonly abbreviated to a VA Loan, is a mortgage which is offered to service members, veterans, or their surviving spouses.

These loans are offered through a U.S. Department of Veteran Affairs program. They are usually issued through private lenders but are backed by the federal arm of the U.S. Government.

How Many Times Can You Use A VA Loan

In this article, we’ll be addressing a common question: How Many Times Can You Use A VA Loan?

We’ll also be looking at topics relating to the VA loan, including entitlement, and how man VA loans you can have at any one time.

What Is A VA Loan?

As mentioned above, VA loans are issued by private lenders but are under a guarantee from the Department of Veterans Affairs.

Unlike conventional loans, a VA loan has some more palatable features such as low interest fees and other costs, due to the VA guarantee. This guarantee ensures that there is a reduced risk to the lender.

One of the best features of a VA loan is that a down payment is usually not required. This makes it one of the best available options for eligible homebuyers.

There are also some local and state authorities that offer property tax exemptions to veterans who quality.

In 2020, the VA Loan Program had a major overhaul including some rule changes, these changes can be found here.

How Many Times Can You Use A VA Loan?

It’s a common misunderstanding that a VA Loan can only be benefitted from once. This is simply not the case. It’s understandable that the outstanding benefits of a VA loan may make it feel like a one-time deal.

As mentioned earlier, you won’t need to save up for a down payment, along with the fact that you won’t have private mortgage insurance to think about.

Throw into this mix the ability to finance 100% of your home’s value, you might be able to purchase the home of your dreams.

If you’re a qualifying veteran, active-duty service member, or a surviving spouse, you can make use of a VA Loan and its benefits as many times as you’d like.

The only caveat to this is that you must still be eligible for a VA Loan and be able to quality with a lender.

It is also possible to have more than one VA loan at the same time, under certain conditions. One such condition is if you need to relocate to a new base/service station.

It can be difficult to sell your current home if you need to move quickly, so you might decide to use your current home as a rental property.

With this in mind, you’ll need to have enough in your VA entitlement in order to purchase a new home with no down payment.

We discuss VA Loan Entitlement in the next section of this article.

What’s My VA Loan Entitlement?

A VA Loan Entitlement is, in a nutshell, the amount of money the VA will guarantee on your behalf to a private mortgage lender.

In other words, if you default on your loan, the VA will cover the cost of your guaranteed amount.

What’s My VA Loan Entitlement

There are usually two types of entitlement status: Full Entitlement or Reduced Entitlement

Full Entitlement

You will have “full entitlement” if either of the following applies:

  • You’re an active service member, veteran, or surviving spouse, and you’ve never had a VA loan before
  • You have made use of a VA loan previously but have since had your entitlement fully restored (typically by selling the home and paying off the mortgage).

Reduced Entitlement

If you are currently using some of your entitlement in a VA loan that you are currently paying off, or if you have defaulted on a VA loan you held in the past, you will have a “reduced entitlement.”

Having a reduced entitlement limits your ability to take out money without needing to put your own money down.

How To Take Out A Second VA Loan

Under certain circumstances, it is possible to have your full entitlement reinstated. Two scenarios in which you can have your full entitlement reinstated are:

  • Selling your property and paying the remaining balance in full
  • Having your current loan assumed by another service member/veteran

If you have already used a portion of your VA loan entitlement, you’ll be limited by whatever amount you have left.

For clarity, when saying “limited” we don’t mean you will be unable to take a larger loan than what your entitlement will allow/guarantee.

It means that you will most likely need to make a down payment to take out the higher loan.

Restoring Your Full Entitlement

In most circumstances, if you’ve had a VA loan to purchase a house and paid it off, you’ll also need to sell the home to restore your full entitlement.

The VA offers a one-time restoration of your full entitlement if you have paid off the VA loan but still own the home you purchased with the VA loan.

The Pros And Cons Of A VA Loan

The one-time restoration of your full entitlement can be used in circumstances where you have paid off the loan and own the home outright, or you refinanced your VA loan into a different type of loan, like a conventional loan.

To apply for a full entitlement restoration, you’ll need to contact the VA. As stated, this type of restoration can only be used once.

The Pros And Cons Of A VA Loan

Being eligible for a VA loan and taking one out are very different. If meet the criteria for a VA loan, the question you might ask yourself is: should I take one out? We’ve broken down the key pros and cons below.

Pros Of A VA Loan

  • You won’t need to purchase private mortgage insurance (this will save you a lot of money long term)
  • VA Loans are set up in such a way that you don’t need to make a down payment

Cons Of A VA Loan

  • A conventional loan may be more suitable for your needs, depending on your credit score and your VA loan limit.

Final Thoughts

VA Loans are a benefit that past and present service men/women have earned by serving their country.

As long as you meet the criteria for a VA loan, and you qualify with a lender, you should take full advantage of a VA loan.

There’s no limit to the number of times you can take out a VA loan in your lifetime. There are, however, certain caveats to this, such as your entitlement.

It is strongly recommended that you work out your entitlement and have the figures in front of you, more information on the different eligibility criteria can be found at VA.gov.

Brad Johnson