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. The answer is yes. Qualifying veterans, active-duty service members and their surviving spouses can use their VA home loan benefit as many times as they’d like.

It’s also possible to have multiple VA loans at the same time in certain circumstances, but that’s where it gets more complex.

How many VA loans can you have?

You can use VA loans only to purchase primary residences, in agreement with their occupancy requirements. That means that usually you can only have one VA home loan at a time.

Still, you can have two VA loans at the same time for two different primary residences if you are moving due to a permanent change of station (PCS) order. Typically, even in such a case, the time you are permitted to own both residences is limited. You’ll have to set an occupancy date of less than a year after getting a loan.

In short: VA rules keep you from simply buying a second home as a financial or lifestyle choice, but if your military service makes it difficult to move without owning two homes for a time, that’s a different story.

What is a VA loan entitlement?

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. If you are eligible for a full VA loan entitlement, it usually means you don’t have to make a down payment.

Understanding VA loan entitlements is important for all VA loan borrowers, but it’s especially relevant to individuals with PCS orders who are considering buying a second home before they sell their first.

How VA loan entitlements work

If you are eligible for a VA loan but don’t currently hold one, you’ll typically 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 may be hard to find homes at this price point, so the VA also guarantees up to 25% of the loan amount for loans that exceed $144,000. There is currently no loan limit that caps the amount the VA will pay 25% on. Your lender will determine what you can afford and approve you for that amount.

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.

To figure out how much entitlement you have left while you still hold another VA loan, 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.

Taking out a new VA loan without selling your house

Generally, paying off one VA loan means you can get another. As we’ve stated, the ability to get new VA loans typically remains a benefit for life. However, that new loan can’t be for an investment property or second home. VA loans need to be used for a primary residence, so you would need to make the new home that you buy with your VA loan your primary residence and designate what was once your home as an investment property or second home.

You will also need to apply for a restoration of entitlement, as the entitlement is usually restored when you sell your current home. However, this type of restoration is usually only available once.

What if your VA loan is not paid off but you want a second property?

If your home isn’t paid off, you still have options. If you want to turn your current primary residence into an investment property and buy a new home with a VA loan, you can refinance your current primary residence into a conventional loan and restore your entitlement that way.

Then, you can use a VA loan for your new primary residence while renting out the home you lived in previously. As with a house you’ve paid off, if you choose this route, you may be able to restore your VA entitlement, but a restoration of this kind is usually only available once.

The bottom line: For consecutive VA loans, there’s usually no limit

If you can qualify for one, there’s no limit to how many times you can take out a VA loan. However, if you’re planning to own two homes at the same time due to a PCS order or if you want to buy an investment property, it can get a little more complicated.

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.