Veterans who have used their VA loan benefits have the opportunity to use it again. In fact, they can use it as many times as they wish. However, they must meet certain requirements. The benefit is life-long as long as the original loan with the VA benefits has been paid in full and the house sold.
Before you can understand how many times you can use a VA loan, you must understand entitlement.
Veterans that are eligible for a VA loan always have basic entitlement. This equals $36,000. The VA guarantees 25% of the loan amount. In this case, basic entitlement equals a $144,000 loan amount. However, in most areas of the United States, homes cost more than this amount. The VA then provides bonus entitlement. The amount you may get cannot exceed the FHA maximum loan limit of $424,100. This means the VA provides an additional guarantee of $70,025 or ¼ of the $280,100.
When you buy your first home, you use up the entitlement that corresponds to the home’s price. For example, let’s say you bought a $200,000 home. You would use up $50,000 of your entitlement. That would leave you with $56,025 left in entitlement, which is a loan amount of $224,100 ($56,025 x 4).
Now, just because you have entitlement doesn’t mean you can use it. Technically, the VA loan is only for an owner-occupied property. The only time you are supposed to be able to use it again is if you sell your current home and pay the loan off in full.
The Exception to the Rule
There is one exception to the above rule. If you are transferred to another position that isn’t within reasonable commuting distance to your home, you may keep your 1st home and buy another. You can’t reuse the entitlement you already used. However, you can use the entitlement that is left over. In the above example, you’d be able to buy another home for $224,100.
Using Your Entitlement Multiple Times
Putting the exception aside, there are ways you can use your entitlement multiple times. It comes down to selling your home and paying off the loan. It’s not enough to just pay off the loan. You also have to sell the home because the entitlement is tied to that home.
If you do sell the home and pay off the loan, it’s like wiping the slate clean. You can ask the VA to reinstate your entitlement. This gives you the chance to use the entitlement multiple times.
There are no rules stating how many times you can use the entitlement. This is only if you make good on your loans, though. If you default on your loan, you won’t be able to reinstate your benefits. If you lose your home in a foreclosure, for example, you’ll lose the portion of entitlement that was tied to that loan. In the above example, you’d lose $50,000 of your $106,025 entitlement.
as a veteran in good standing, you can use your entitlement as many times as you wish. You just have to handle the loan appropriately. Make your payments on time and pay the loans off in full each time you want to move and buy another home.
In the end, you have access to as many VA loans as you want. If you need an exception to the rule in order to use your entitlement multiple times at once, you’ll have to take it up with the VA. In most case, they allow it to happen as long as you have a good payment history on your current loan.