How Many Times Can You Use A VA Loan?

If you’ve used a VA loan to purchase a home in the past, you know what great benefits they have: low interest rates, no mortgage insurance and no down payment requirement. Local and state authorities may even offer property tax exemptions to qualifying veterans.

If you’re planning to buy a new home soon and you’ve already used a VA loan for a previous home purchase, you might be wondering if you can take out another VA loan. Is there a limit on how many times you can use a VA loan? Let’s find out whether you can use a VA loan more than once.

Qualifying veterans, active-duty service members and their surviving spouses can use their VA loan benefit as many times as they’d like. As long as you’re still eligible for a VA loan and are able to qualify with a lender, there’s no limit to how many of these mortgages you can take out over the course of your life.

In fact, it’s even possible to have more than one VA loan at the same time in certain circumstances. We’ll get into that later on in the article.

There are many different types of VA loans and they come with many benefits, chief among them being that you don’t need to make a down payment to purchase a home.

Because the down payment is often the biggest hurdle to homeownership for borrowers, especially those who are first-time home buyers, VA loans can make homeownership much more accessible for those who qualify.

VA loans are also backed by the Department of Veterans Affairs (VA). The VA doesn’t issue VA loans itself but insures mortgages provided by lenders. This reduces the risk to the lender, meaning that VA loans often come with more flexible terms than what you’d get with other types of mortgages, such as conventional loans or FHA loans.

Who Can Borrow A VA Loan?

The VA has different eligibility criteria for VA loans depending on when and for how long you served. You need to meet at least one of the following requirements to qualify for a VA loan.

• You’ve served at least 181 days of active service during peacetime.
  
  
• You’ve served a minimum of 90 consecutive days of active service during wartime.
  
  
• You’ve served more than 6 years of service with the National Guard or Reserves, or 90 days under Title 32 with a minimum of 30 consecutive days.
  
  
• You’re the spouse of a service member who lost their life in the line of duty or as the result of a service-related disability. You typically cannot be remarried, but there are some exceptions.

What Are The Drawbacks Of Making A 0% Down Payment?

The one trade-off for getting a 0% down payment mortgage is that you’ll have to pay a higher VA funding fee, which is required for all VA loans, than you would with a down payment. This is a one-time fee that helps to cover the cost of the VA loan program.

First-time VA borrowers who make a down payment of less than 5% will pay a fee equal to 2.15% of the loan amount. Subsequent borrowers with the same down payment pay a little bit more at 3.3%. If you put down a larger down payment, your funding fee will be lower. This fee can be paid at closing or financed into the VA loan.

VA loans can only be used to purchase primary residences, and they come with occupancy requirements to ensure that this is how the loan will be used.

That being said, it is possible to have two VA loans at one time for two different primary residences. This can sometimes occur when a service member receives permanent change of station (PCS) orders, meaning they have to move to a new duty station.

When Would You Have More Than One VA Loan?

Let’s consider a hypothetical: Let’s assume you’ve just received PCS orders and now have to move to a new county or state.

You took out a VA loan to finance your current home and plan to buy a second home using a VA loan as well. In the process of moving, you have a hard time selling your home. Or, you don’t want to sell the house and would prefer to hold onto it and rent it out to tenants.

In this situation, as long as your credit score and financial factors help you qualify for a VA loan, you’d be able to get a VA loan for your new primary residence while retaining the current property. If you’re earning rental income on the existing home, you may also be able to use that income to offset the cost of the mortgage for your new home when you apply for your second VA loan.

However, you might be limited in how much you can borrow without having to make a down payment on the second VA loan, depending on how much of your entitlement is left.

Your VA loan entitlement refers to how much of your loan the VA will guarantee. Put simply, it’s how much the VA will pay your lender if you default on the loan.

The VA will only guarantee a loan up to a certain amount. This amount is your VA loan entitlement. There are two different types of VA loan entitlement: full entitlement and reduced entitlement. Below, we explore what each form of entitlement is and how each affects the number of VA loans you can borrow during your lifetime.

Full Entitlement

If you’ve never had a VA loan before, or you’ve purchased a home using a VA loan but have had your entitlement fully restored (often due to selling the home and paying off the mortgage), you’ll have what’s known as “full entitlement.”

For loans less than $144,000, the VA will guarantee up to $36,000. This is sometimes referred to as your basic entitlement. Of course, it’s hard to find homes at this price point in many areas of the country, so the VA also guarantees up to 25% of the loan amount for loans that exceed $144,000. You may see this amount referred to as bonus entitlement or tier 2 entitlement.

Reduced Entitlement

If you already have some of your entitlement tied up in a VA loan that you’re currently paying off, or if you defaulted on a previous VA loan, your entitlement amount is reduced. This limits how much you can take out without having to put your own money down.

You may also have a reduced entitlement if you paid off a previous VA loan but still own and/or occupy the property you purchased with a VA loan. In this case, it’s possible to apply for a one-time restoration of your full entitlement.

If you’re applying for a second VA loan with a reduced entitlement, your entitlement amount will be based on the maximum VA loan limit for your area (in most areas, this is $766,550 in 2024), minus the entitlement you’ve already used.

Because the VA will guarantee up to 25% of the loan, this means that, in most areas of the country, you’ll have a reduced entitlement up to $181,550 ($766,550 × 0.25 = $191,637.50) minus the entitlement currently tied up in a VA loan.

If you buy a home that costs more than what the VA will guarantee 25% of, you’ll need to make a down payment equal to 25% of the difference.

Reduced Entitlement Example 1

To better understand this, let’s revisit our earlier example.

You purchased your current home for $250,000. On a loan of this size, the VA guarantees up to $62,500, or 25% of $250,000. So, when you go to apply for your second VA loan to buy a new house at your new duty station, your entitlement amount will be reduced by that much.

The loan limit in your new area is the standard loan limit: $766,550. This means that the maximum entitlement would be $181,550. However, we have to subtract the entitlement that’s being used for your current VA loan from that number.

$191,637.50 − $62,500 = $129,137.50

This means that your remaining entitlement is equal to $119,050. To find out the maximum loan you can take out without having to make a down payment, we need to multiply that number by four.

$129,137.50 × 4 = $516,550

You can take out a loan of up to $516,550 without having to make a down payment.

Reduced Entitlement Example 2

But what if you find a house you’d like to buy for $600,000? Because this amount exceeds your remaining entitlement, you’d need to cover 25% of the portion that isn’t guaranteed by the VA. The difference between the home’s cost and the maximum loan amount your entitlement will cover is $83,450.

If you wanted to buy the home that costs $600,000, you’d need to make a down payment of $20,862.50, or 25% of $83,450.

If your entitlement is reduced, it’s possible to have your full entitlement restored in certain circumstances. If this isn’t possible, you’ll be limited by the amount of entitlement you have left.

Keep in mind that, when we say “limited,” it doesn’t mean you can’t take out a larger loan than what your entitlement will guarantee. Instead, it means you won’t be able to take out a VA loan without making a down payment. Remember, lenders will typically require that 25% of your loan amount is covered either by your entitlement, a down payment or a combination of the two.

If You’re Borrowing One VA Loan At A Time

If you’ve previously had a VA loan that you’ve already paid off, you’ll typically also have to sell the home to have your full entitlement restored.

However, the VA allows for a one-time restoration of full entitlement for homeowners who have paid off their VA loan but still own the property they purchased with a VA home loan. This can be used in circumstances where you’ve either finished paying off your VA loan and now own your home outright or you’ve refinanced your VA loan into a different loan type, like a conventional loan.

You’ll have to apply for entitlement restoration through the VA. You can only use this type of restoration once. In the future, you’ll have to follow the standard rule of selling the property before you can have your entitlement restored.

If You Have Multiple VA Loans

If you receive PCS orders and need to keep your current VA loan while also taking out a new one for a home in the place you’ve been relocated to, it’s possible to have more than one VA loan at a time.

Remember that your entitlement will be limited by how much of it has been used by your current VA loan. To figure out how much entitlement you have left, take your maximum entitlement (your county’s loan limit × 25%) and subtract the entitlement being used by your current loan.

Then, multiply that number by four to see the maximum amount you can borrow without having to make a down payment. If you take out a loan for more than this amount, you’ll need to make a down payment of 25% of the excess.

If you’re an eligible veteran and can qualify for a VA loan, there’s no limit to how many times you can take out a VA loan in your lifetime.

However, there are a few circumstances where there may be limits on how much you can borrow without having to make a down payment. If you’re planning to get another VA loan without paying off your current one, or if you’ve paid off a previous VA loan but didn’t sell the house, you might have a reduced entitlement or have to apply for one-time entitlement restoration.

If you’re thinking about applying for a VA loan, get started by preparing for one of the first steps in the approval process: securing your certificate of eligibility (COE). We can help you secure your COE and move forward in the home buying process if you apply online today.