You’ve done your research on the VA loan program. You know it offers incredible benefits for eligible service members, veterans, and surviving spouses looking to buy a home. But did you also know that you may be able to use the benefit multiple times? That’s right — a second VA loan is within reach for many. It can make becoming a repeat homeowner (or even owning two homes at once.) possible without needing a huge down payment.
Table of Contents:
- Understanding VA Loan Entitlement
- How Many Times Can You Use a VA Loan?
- Restoring Your VA Loan Entitlement
- Things to Consider: The Fine Print
- Conclusion
Understanding VA Loan Entitlement
Before we discuss the details of getting a second VA loan, it’s essential to grasp how VA loan entitlement works. This is the cornerstone of how this valuable benefit can be used multiple times.
What is VA Loan Entitlement?
Think of your VA loan entitlement as the amount of money the Department of Veterans Affairs promises to cover if you default on your mortgage. This guarantee makes lenders much more willing to approve VA loan borrowers — even with zero down and competitive interest rates.
This backing is a huge perk, but it isn’t unlimited. There are two types of entitlement you’ll often hear about:
- Full Entitlement: This typically means you can buy a home with no down payment up to the VA loan limits for your area.
- Partial or Reduced Entitlement: If you’ve used a portion of your VA loan benefit before, you’ll have a reduced entitlement. This usually means you’ll need a down payment on the next one. You’re entitled to borrow up to your county’s VA loan limit, which often exceeds conforming loan limits set by Fannie Mae and Freddie Mac, as you’ll see on their Loan Limits page.
How Many Times Can You Use a VA Loan?
There isn’t a limit to how many times you can use your VA loan benefit — as long as you meet specific requirements each time you apply. The VA will still assess your finances and make sure you are a responsible borrower on every application.
Let’s look at some common scenarios when getting a second VA loan is possible:
- You’ve Paid Off Your Previous VA Loan: Once you’ve completely paid off your VA mortgage and sold the house, your full entitlement can be restored, and you can get another VA loan whenever you’re ready.
- You’re Refinancing Your VA Loan: A second VA loan can be used for refinancing your existing VA mortgage. Maybe you want to score a lower interest rate through a VA Interest Rate Reduction Refinance Loan (IRRRL), also called a streamline refinance.
- You Want to Own Two Homes: The big question for many is, “Can I get a second VA home loan while still having an existing one?” The short answer: yes, it’s possible. You’ll need to show your lender you can comfortably make both mortgage payments with your income and debt. You also need to ensure enough VA loan entitlement remains to purchase the second property. Active-duty service members who get orders for a Permanent Change of Station (PCS) might use this option.
| Loan Type | Minimum Credit Score Requirement | Down Payment Requirements | Loan Limit |
|---|---|---|---|
| Purchase Loan | 620 | 0% | Based on county limits |
| Interest Rate Reduction Refinance Loan (IRRRL) | Typically 620, but some lenders may have exceptions. | 0% | Original loan amount (plus allowable closing costs). |
| Cash-Out Refinance Loan | Typically 620, but requirements vary by lender. | 0% (but subject to available equity) | Based on county limits |
Restoring Your VA Loan Entitlement
As you explore your options for a second VA loan, it’s vital to understand entitlement restoration. Even if you’ve used your entitlement, it can often be replenished.
Here’s what you should know:
- Selling and Paying Off: The most straightforward way to restore your entitlement is to sell the home you bought with the VA loan and then fully repay the loan. This frees up your entitlement, making you eligible for another VA loan in the future.
- The Assumption Option: In some cases, a fellow veteran or eligible borrower might purchase your existing home and assume your current VA mortgage. According to the U.S. Department of Veterans Affairs, if you can find a buyer willing to do this, it could lead to restoring your full entitlement even if you haven’t completely paid off the loan yet. It’s wise to discuss the specifics with your lender and a financial advisor to ensure a smooth process.
Things to Consider: The Fine Print
Before you get your hopes up on snagging that vacation condo or rental property with a second VA loan, be aware of some crucial things. VA loans are intended for your primary residence — the place where you’ll be living most of the year.
If you’re thinking about renting your current VA-financed property and getting a second loan on another house, there are more hurdles. You generally can’t buy a similar-sized home in the same area using this method, and the income from your existing rental can’t be factored into your debt-to-income (DTI) calculation during underwriting.
Lenders need to see that you can handle payments on both mortgages independently.
Conclusion
Navigating the details of getting a second VA loan doesn’t need to be overwhelming. Now that you understand the ins and outs of using your VA loan benefit more than once, you can plan to purchase your next dream house with more clarity and confidence.
It pays to connect with a knowledgeable VA lender to explore your eligibility and discuss any questions about using this benefit for your future homeownership goals.
