09 Nov How Many VA Home Loans Can You Have?
You may qualify for a Veterans Affairs loan if you served in the military or are a veteran. But how many VA loans can you take out during your lifetime? Veterans can use the loan program as many times as they want. However, to qualify for a second VA loan, you will need to review your eligibility.
It’s important to know what the process entails and how entitlement works before you start. In this article, you will learn how many VA loans you can obtain and how to apply.
How Many VA Home Loans Can You Have?
There is no limit to how many VA loans you can have simultaneously, but they must be used for primary residences and have strict occupancy criteria. It is feasible to have two VA loans for multiple residencies at the same time.
Let’s imagine you purchase a property in your current duty station and, years later, receive PCS orders. As an alternative to selling the house, you could rent it and use your remaining VA loan eligibility to buy a new property at your new duty station.
See all of the different VA loan types you can choose from!
VA Entitlement and Limits
Veterans who qualify for a VA loan have VA loan entitlement. Essentially, the VA will reimburse your lender a set amount if you default on your mortgage.
Entitlement Not Reached
You may be able to reclaim all or part of your entitlement if you meet the following conditions:
- Repayment of the entire loan and sell the property
- A qualified Veteran agrees to take the unpaid balance and replace your VA entitlement with theirs
- Make use of the VA’s one-time entitlement restoration service. This one-time use allows you to retain ownership of the property once you’ve paid off your VA loan.
To restore your entitlement, you must apply by filling out VA Form 26-1880 and returning it to any VA regional office or center.
Learn more about VA loan assumptions!
VA Loan Limits
You can take out a VA loan for the rest of your life if you qualify. It has no expiration date, and you can be partially or fully utilized. Although you can borrow up to $484,350, most lenders will require a down payment since the VA only covers 25% of the loan amount. The amount of entitlement you used and why you wish to use it again determine whether it can be used again.
In 2021, the VA loan limit is expected to rise from $510,400 to $548,250 in most U.S. counties. In 2021, VA loan limits for more expensive housing markets in the continental United States will rise to $822,375, up from $765,600 in 2020. There is no maximum or cap for VA loans.
It is vital to remember that you may not automatically qualify for VA benefits. Your entitlement amount will be listed on your COE (Certificate of Eligibility). It can sometimes be inaccurate, so be sure to double-check it.
Fill out VA Form 26-1880 to notify the Veteran’s Administration that you have met your obligation to repay the previous loan. This form is the same one you filled out to obtain your original Certificate of Eligibility. Your lender can assist you in filling out the paperwork if you are seeking restoration.
The VA may require a copy of the final HUD from your previous sale as proof that the loan has been paid. Therefore, save any information from the prior loan’s closing.
Calculate how much you will pay each month with our VA loan calculator!
Active Duty Military Guidelines for VA Home Loans
The VA loan provides active-duty military personnel with a fantastic opportunity to buy a home. These loans are originated by VA-approved lenders and are administered by the Department of Veterans Affairs (e.g., banks, credit unions, and mortgage companies).
The VA guarantees a portion of each loan. If a borrower defaults, the VA will pay a portion of the outstanding loan to the lender. This lowers lender risk, allowing them to give borrowers excellent terms. These include:
- No required deposit
- No required private mortgage insurance (PMI)
- Historically low-interest rates
- Simplified refinancing through the Interest Rate Reduction Refinance Loan (IRRRL)
How Does This Affect A Military Spouse?
A spouse can meet the occupancy requirement for married active-duty service personnel. The same holds for married veterans who work overseas as contractors or in other roles.
Single civilians working overseas or married veterans looking to buy property in a different area from their work may find it challenging to meet the occupancy requirement.
Can You Use a VA Loan for a Second Home or Investment Property?
A second VA loan can be used to purchase a second house, but there are some restrictions. You must be entitled and financially eligible for the second VA loan. You must also show the VA that your second property provides a “net tangible advantage.”
These tangible advantages include but are not limited to:
- Closer proximity to your workplace
- An upgrade to a larger home
- Having to downsize
- Purchasing a home for your spouse that lives in another state
To be qualified for a second residence, you must have at least one net tangible advantage. These standards should not be too difficult to meet if you are a military member moving to a new state.
Primary Residence Requirements
Loans through the VA are only available for primary residences. Vacation homes, rental properties, farms, or other non-primary residences are not permitted.
The primary residence criterion stipulates that the borrower must live in the house full-time. They must occupy the property within a reasonable period of time after closing or prove that they intend to do so. A realistic timeline is 60 days from the closing date.
It is permissible to extend the reasonable time for occupancy if future events render that date impossible to achieve. Extending the period beyond a year is usually considered unreasonable.
Can You Buy a Property to Be Used as a Rental Property With a VA Loan?
The Department of Veterans Affairs allows VA homebuyers to acquire homes with multiple units if one unit is their primary residence. However, VA mortgages cannot be used to buy property or land merely for investment or rental purposes.
Other Options for a Second Mortgage
Veterans have a few additional options when looking for a second mortgage. These include:
1. Home equity loan (HEL): A one-time, lump-sum loan with a fixed interest rate. These loans are not issued by the VA and can be used with your current VA loan.
2. Home equity line of credit (HELOC): This is a maximum loan limit, not a one-time payment, that permits you to borrow, repay, and borrow again. These loans, like HELs, are not available via the VA and serve as a second mortgage.
3. VA cash-out refinances: A VA cash-out refinance, while not technically a home equity loan, allows you to access your home’s equity as cash while still taking advantage of the VA loan program’s many perks. This loan will pay off your current mortgage.
To Sum Up
There is no limit to how many times you can take out a VA loan in your life as long as you are eligible and can qualify with a lender. However, the amount borrowed without a down payment may be limited.
If you’re considering applying for a VA loan, get started by obtaining your certificate of eligibility.