Yes, it is possible to have two VA loans at the same time under certain circumstances. This can be beneficial for veterans who wish to purchase a new home before selling their current one, or for those who are relocating but want to retain their existing property. The key factors that allow for multiple VA loans include entitlement usage and eligibility, financial qualification, and the intended use of the property.
Table of Contents
Primary Requirements for more than one VA loan:
- Entitlement: VA loan entitlement is the amount the Department of Veterans Affairs guarantees for each veteran. Partial entitlement may be available if some of it was used for another loan, allowing for a second VA loan.
- Financial Qualification: Borrowers must qualify for the second loan with sufficient income and credit scores, ensuring they can manage the mortgage payments.
- Property Use: The new property must be intended for your primary residence. The VA loan program does not allow these loans for investment properties or vacation homes.
KEY TAKEAWAYS
- Veterans can use their VA loan benefit as many times as they want as long as they’re still eligible.
- Whether a Veteran qualifies for a VA loan with no money for a down payment depends on their remaining entitlement.
- VA loans are intended to be used for primary residences. But having two VA loans at the same time is possible (and more common then you think), you must still meet the VA’s occupancy requirements.
- You can still buy with a VA loan if you had a prior foreclosure on a VA loan.
How Many Times Can You Use a VA Loan?
There was a lie going around, and I occasionally still hear it, that you can only use your VA home loan benefit once.…”so save it for your big boy/girl house”. This is a myth! Veterans can use their VA loan benefit as many times as they want, as long as they meet the criteria set by the VA.
If you can qualify with a lender and still have enough remaining entitlement, you can take out a VA loan as often as you like. Understanding your remaining entitlement is the most crucial piece to this puzzle, so work with a lender that specializes in VA loans.
How Do I Get A Second VA Loan?
There are a couple of different answers for this question, such as a one-time restoration to a VA assumption. But for this article, I will focus on the scenario that you currently have a VA loan and will be keeping that house to purchase another using a VA loan.
Understand that you have basic entitlement, but you also have bonus entitlement. If a Veteran used up their basic entitlement in purchasing their first home, they can now tap into the bonus entitlement to purchase their second home using the VA loan benefit.
Do I have to put money down on the second VA loan?
Maybe or maybe not. This is where working with a great lender that specializes in VA loans comes in handy. With getting to confusing with the math, let’s just say that the Veteran has enough bonus entitlement to buy another home at $400,000. This would mean that the VA will not require any money down for a down payment for a home up to $400,000.
Does this mean a Veteran can’t buy a home higher then that amount?
No. The VA will only guarantee the lender up to that amount. If the Veteran wishes to purchase higher, then he/she would have to put down 25% of the difference between the max the VA will guarantee and the higher purchase price.
Back to the example: You can only go to $400,000 on your new VA loan with no money down, but you want to buy a home that is $440,000. In this scenario, you would have to bring in 25% of the difference of $440,000 and $400,000… which would be $40,000 x .25% or $10,000 down payment.
Do VA loans have to be owner occupied?
Yes. The VA clearly states that: The law requires a veteran obtaining a VA-guaranteed loan to certify that he or she intends to personally occupy the property as his or her home. As of the date of certification, the veteran must either • personally live in the property as his or her home, or • intend, upon completion of the loan and acquisition of the dwelling, to personally move into the property and use it as his or her home within a reasonable time. (VA Pamphlet 26-7, Chapter 3)
A reasonable time is 60 days, but there are some exceptions.
Can I use a VA loan if I have foreclosed on a VA loan?
Short answer is YES! You can buy a home using a VA loan, even if you foreclosed on a VA loan in the past. However, you will have two options here.
- You can pay the VA back for the loss and get your entitlement restored.
- You can just leave that entitlement tied up and see how much bonus entitlement you have remaining.
I have come across Veterans that have been told they can’t use their VA home loan benefit because they foreclosed in past – or that they have to pay all of it back to use it again. Just simply not true!
Conclusion – Two VA Loans
In conclusion, you can have two VA loans at the same time. Just understand the entitlement piece of the puzzle. This will answer so many questions you might have on this topic. If you have any questions on purchasing another home with a VA loan, or understanding the entitlement concept, then please gives us a call. We are here to help you.
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Joseph Small and Team at Patriot Pacific Financial Corp – Arizona’s VA Home Loan Experts! – have 20+ years of experience of helping eligible veterans and active-duty service members use their VA home loan benefit. Joseph is also a certified Veteran Mortgage Advisor. Give us a call to get started. #whoyouworkwithmatters
Joseph Small is also licensed in Alabama (ID 90940), Colorado (CO-#100538700), South Carolina (MLO-380188) and North Carolina (I-219980), if you need assistance with a purchasing a home.
**All loans subject to underwriter approval. Terms and conditions apply, subject to change without notice. Patriot Pacific Financial Corp is an Equal Housing Lender.
