How Many Times Can You Use A VA Loan?

VA loans are mortgages for veterans, active service members and eligible spouses. The U.S. Department of Veterans Affairs (VA) backs VA loans, which reduces risk to your lender if you default on the loan.

So, how many times can you use a VA loan? Those who qualify can use VA loans multiple times if they meet eligibility requirements.

As long as you qualify for a VA loan and still have entitlement available, you can use a VA loan as many times as you need. There is no limit, and you can continue to take out VA loans as long as your entitlement remains.

Qualifying For A VA Loan

Take a look at a few eligibility requirements for Department of Veterans Affairs (VA) loans, noting that you must also plan to purchase a primary residence. You may only use a VA loan to purchase a second home or investment property in certain situations. Check with your lender to find out if you would qualify for a VA loan in this situation.

You must also get an appraisal for a VA loan with a certified appraiser that must meet the VA standards.

You also need a certificate of eligibility (COE), a document that offers an active-duty service member or veteran that shows that they meet the military service requirements to apply for a VA home loan.

Financial Considerations When Applying For VA Loans

You must also meet certain financial requirements to take out a VA loan. These financial requirements include:

• Credit score: While the VA credit score requirement varies from lender to lender, most lenders require a credit score between 580 – 650. You can still qualify for a VA loan even if you don't have excellent credit.
• Debt-to-income ratio: A debt-to-income (DTI) ratio compares your debt to your income. Lenders typically want to see debt below 41% for a VA loan, though that might vary from lender to lender.
• Down payment: VA home loans typically don't require a down payment unless your lender deems it necessary.
• Employment history: Lenders typically want to see borrowers have a steady job for at least 2 years, though newly discharged veterans may see a break from this requirement.

Military Service Considerations When Applying For A VA Loan

How long must you serve to receive a VA loan? Let's take a look:

• Active-duty service (peacetime): 181 consecutive days
• Active-duty service (wartime): 90 consecutive days
• National Guard or Reserves service: 6 years
• Service-related disability discharge: Service time requirements don't apply
• Under Title 32: At least 90 days, with 30 consecutive days

As a veteran, you will need to have DD214 discharge or separation documents. Active service personnel need a statement of service signed by their personnel officer or commander, including your name, Social Security number, birthdate and service start date, among other things.

Qualifying As The Spouse Of A Veteran

Qualifying for a VA loan as the spouse of a veteran means you'll also have to meet certain requirements to qualify for dependency and indemnity compensation. Surviving spouses must have their deceased spouse's DD 214 papers and possibly other documentation.

Understanding VA Entitlement

The COE also contains information about something called an "entitlement amount." The entitlement simply refers to the amount of your loan the VA will guarantee (aka how much the VA will pay your lender if you default on the loan). Entitlement comes with codes that match wartime or peacetime periods and show how you earned your entitlement. Note that while you can take on multiple VA loans, it's important to understand your entitlement.

Basic Entitlement

Your COE tells you how much you have in basic entitlement.

For example, your COE may say your basic entitlement is $36,000. Note that this isn't a limit on the amount you can borrow or the amount the VA will guarantee. For loans under $144,000, the VA will guarantee 25% of the loan amount up to $36,000. Once you use up your basic entitlement, your bonus entitlement goes into effect.

To find the amount of entitlement you've used, multiply your loan amount by 0.25.

Bonus Entitlement

You'll typically have additional entitlements you can use, including bonus entitlement. For loans over $144,000, the VA will guarantee up to 25% of your loan amount.

Reduced Entitlement

Reduced entitlement doesn't mean limiting how much you can borrow to purchase a home. However, if your loan amount exceeds your basic and bonus entitlement, you must make a down payment.

If you have reduced entitlement, the VA only guarantees up to 25% of the county's conforming loan limit, minus the amount of entitlement you've already used.

Restoring Entitlement

Have you previously taken out a VA loan? If so, you can restore your entitlement by paying back the loan and selling the property attached to it. If you've paid off your prior VA loan, you can have your used eligibility restored.

One time, you may have your eligibility restored if you've paid your prior VA loan in full but you still own the property. To get eligibility restoration, you must send a completed VA Form 26-1880 to the Atlanta Eligibility Center.

When Do You Need To Use A VA Loan More Than Once?

You may need a VA loan more than once. Let's look at a few instances when you could consider doing that.

Using A VA Loan For A Second Home

How many VA loans can you have? Believe it or not, a borrower may be able to use a VA loan for a second home. You might remember that a VA loan can only be used for a home purchase if the borrower plans to use the home as a primary residence.

However, you may need two VA loans at once for two different primary residences. As long as you have adequate qualifications for a VA loan, you can get a new VA loan for your new primary residence while retaining your property. You may want to keep the old home to offset the cost of the mortgage, so you apply for a second VA loan.

Note that you might have to pay a down payment on the second VA loan, depending on how much entitlement you have left over.

Foreclosed On A Former VA Loan

If you defaulted or were foreclosed on with a previous VA loan, whether through a foreclosure, short sale or deed-in-lieu, you must wait another 2 years before getting another VA loan. When you reapply, your lender will have you go through underwriting to ensure you can make your mortgage payments.

Relocation Due To Military Service

You can qualify for another VA loan if you need to move locations due to permanent change of station (PCS) orders.

Should You Use A Second VA Loan?

There are benefits and potential risks involved with getting multiple VA loans. You may own two homes with no money down and even tap into interest rates lower than conventional loans.

However, beware of the risks – buying homes with no down payment means your home value could drop, leaving you with a loan balance greater than the home value. You will also be limited to how many VA loans you can get with no money down – it depends on your area of the country.

Finally, remember that depending on your entitlement and eligibility, you may make a down payment on your second VA loan.

Consider Funding Fees Before Using A Second VA Loan

To keep the program going, you'll pay a one-time funding fee on your VA loan, which also lowers taxpayers' costs.

The amount you pay in funding fees depends on your loan type, down payment amount and your military role. You will pay between 0.5% – 3.3%, which you can pay upfront or incorporate into your total loan amount.

If you have a service-related disability, a Purple Heart or are a surviving spouse of certain types of veterans, you may not have to pay a funding fee.

The Bottom Line

How many times can you use a VA home loan? Talk to a lender about all your options. Consider financial, military service, entitlement and other factors before you make a decision.

Still have questions about refinancing or purchasing your new home? Get help from a real estate agent today.