VA Loan Entitlement: Everything You Need To Know

Understanding your VA loan entitlement and the role it plays in the home buying process can be challenging. However, with a little guided research, you’ll be able to identify key concepts such as how much VA loan you qualify for and how to calculate this number.

Once you start shopping around for a mortgage, it’s important to understand the amount you can borrow to purchase a home. If you’re eligible for a VA loan, your certificate of eligibility (COE) will state the size of your entitlement.

Let’s carefully explore the basics of VA loan entitlements, the different types of VA loan entitlement, and how to calculate your VA entitlement amount if you’re VA entitlement-eligible.

What Is VA Entitlement?

VA entitlement is the amount the Department of Veterans Affairs (VA) will guarantee on a borrower’s VA loan. In other words, it’s the maximum amount the VA will repay your lender if you default on your loan.

One of the great benefits of getting a VA loan and certain other non-conforming loans is that you don’t need to make a down payment. Your VA entitlement amount indicates the maximum amount you can borrow without making a down payment.

Full Entitlement

You should have full entitlement if you’ve never taken out a VA loan or you paid off a previous VA loan and sold the property the loan was used to purchase.

When you have full entitlement, none of your entitlement is tied up in another property and your full entitlement is available to purchase a home.

There’s no limit on how much you can borrow without needing to make a down payment. The VA will guarantee up to 25% of the loan amount – even if it exceeds the conforming loan limit in your county or the county where you want to buy a home.

However, that doesn’t mean you can borrow an unlimited amount of money; you can only borrow as much as a lender qualifies you for. Your lender will look at your income, credit score, debts and credit history to determine how much they’ll let you borrow.

Reduced Entitlement

If your entitlement amount is reduced, technically, there’s no limit on how much you can borrow to purchase a home. But if your loan amount exceeds your total entitlement amount (basic entitlement plus bonus entitlement), you have to make a down payment.

You may have partial entitlement if you’re currently paying back a VA loan, you defaulted on a previous VA loan, or you’ve repaid your loan but still own the home you purchased with the loan and you haven’t received your one-time entitlement restoration.

If your entitlement is reduced, the VA will only guarantee up to 25% of the county’s conforming loan limit – minus the amount of your entitlement you’ve already used.

Certificate Of Eligibility (COE) And VA Entitlement Codes

A certificate of eligibility (COE) is a document proving an active-duty service member, veteran, surviving spouse, or someone who’s served in the National Guard or Army Reserve meets the military service requirements to apply for a VA home loan. The COE also contains information about the entitlement amount.

Your COE will have an entitlement code listed on it. Most entitlement codes correspond with specific wartime or peacetime periods and indicate how you earned your entitlement.

If you don’t have a COE, your lender can typically obtain this for you once you start the mortgage application process. You can also apply for your COE online through the VA’s eBenefits site.

Types Of VA Loan Entitlement

Your COE will tell you how much you have in “basic” entitlement. However, you’ll also likely have an additional entitlement – sometimes called your bonus or Tier 2 entitlement.

The ideas of basic entitlement and bonus entitlement can get a little confusing, but borrowers generally won’t have to worry about these terms.

Here’s a short breakdown of the two types of entitlement and how they work.

VA Loan Basic Entitlement

If you have full entitlement, your COE will say, “This veteran’s basic entitlement is $36,000.”

It’s important to note that the $36,000 isn’t a limit on how much you can borrow or how much the VA will guarantee. For loans under $144,000, the VA will guarantee 25% of the loan amount up to $36,000.

That doesn’t mean you’re limited to loans up to $144,000. Once you’ve used up your basic entitlement, your bonus entitlement kicks in.

VA Loan Bonus Entitlement

Bonus entitlement is available for loans over $144,000. If you have full entitlement, the VA will guarantee up to 25% of your loan amount.

If your COE states that your entitlement is $0, it doesn’t mean you’re loan ineligible; it just means that your entire $36,000 basic entitlement is currently being used. You may still have bonus entitlement available.

To figure out how much bonus entitlement you have after using your full basic entitlement, you’ll have to do a little bit of math. Let’s see how to calculate this.

Calculating Your VA Entitlement Amount

You don’t have a loan limit if you have full entitlement, so you don’t need to worry about calculating how much entitlement you have. You can borrow as much money as a lender is willing to lend, with no down payment.

If you have reduced entitlement and want to know how much you have left, you’ll need to figure out how much entitlement you’re currently using.

Remember that the VA guarantees up to 25% of your loan. To find out how much of your entitlement you’ve used, simply multiply your loan amount by 0.25.

VA Loan Entitlement Formula

This is how the formula would look for calculating your entitlement:

Loan Amount × 0.25 = Entitlement You’ve Used

You’ll also need to determine your county’s conforming loan limit. In 2025, the standard VA loan limit with reduced entitlement is $806,500 for a one-unit home. Higher-cost areas have limits determined on a county-by-county basis. In the highest-cost areas, the loan limit is as high as $1,209,750. It’s also higher than the standard limit for a one-unit home if you’re buying more than one unit.

How Do You Calculate The Maximum Loan Amount With Partial Entitlement?

The maximum entitlement is equal to