How many VA loans can you have? If this is what you are thinking, then you are in the right place. Getting a VA home loan program is an ideal option for veterans to make their dream come true and settle into beautiful homes with their families. Since these are primarily designed for veterans, you can enjoy flexible requirements and plans, compared to conventional loans. If you want another loan and are wondering whether it’s possible or not, read on to learn more.
What is a VA Home Loan Entitlement?
VA loan entitlement refers to the amount the U.S. Department of Veterans Affairs will offer on a VA home loan. This institute will also help determine how much a veteran can receive before needing a down payment. Furthermore, the VA loan entitlement is around $36,000 or 25% of your loan amount.
Eligible survivors, service members, and veterans with full VA loan entitlement don’t have any limitations on loans over $144,000. Hence, if you don’t have money for a down payment, full entitlement guarantees your lender that if you are not able to pay or default, VA will protect them from incurring a loss of up to the amount guaranteed, which is 25% of the original loan amount.
Borrowers will be eligible for the full entitlement if any of these statements are true:
· They have paid a completely paid a previous VA loan but sold their house
· They have never used their VA loan benefit
· They have used their VA home loan benefit, had a compromise claim or foreclosure, and repaid the department in full.
Understanding Remaining Entitlement
If you have remaining entitlement, your loan limit will be based on where you live. So, if you default on the loan, VA will pay the guaranteed amount to the lender, i.e. 25% of the loan limit. Then, you have to pay back the VA. For this, you might lose your home through foreclosure or have to return money to VA through a plan.
The borrower can use their remaining entitlement to apply for another loan. You might have remaining entitlement if you meet any of the following requirements:
· You paid your last loan in full as well as have the property.
· You have an active current loan that you are regularly paying.
· You have ownership of the property and refinanced your VA loan with a non-VA loan.
· You have a foreclosure on your last loan and haven’t paid the institution in full
· You had a short sale or compromise claim on a former VA loan and haven’t paid the department of veterans in full
Can You Have Two VA Loans Simultaneously?
Wondering how many VA loans can you have? Well, you can have two VA loans at a time for two separate primary residencies. However, there are some conditions that you need to meet to apply for the loan.
Having Two VA Loans at Once in Particular Circumstances
A veteran can face some situations that help them get another VA loan. One of the most common is that they decide to move out of their current home. Here are some other situations due in which you may need another VA home loan.
You Already Pay Off a Former VA Loan
If you paid your previous VA loan in full, you are eligible to apply for another loan. Paying back the loan shows that you are a responsible person and have the ability to pay back again if you get another loan. Therefore, the Department of Veteran Affairs will approve your loan application.
Another Veteran or Active Military Homebuyer Assumes Your VA Loan
VA loans are transferable if your lender approves the process of a loan assumption. In this case, the lender evaluates whether the other person can meet the requirements of VA loans and is eligible for the loan. If yes, a lender will give the financial responsibility to the other person to for mortgage payments. So, if your existing VA loan has been assumed by an active military or veteran homebuyer, you can get another loan.
You Decided to Buy a New Property after Defaulting on a VA Loan
Defaulting on any government-backed loan can make it challenging for you to apply for another loan for homeownership. However, it doesn’t mean that you can’t get one. You need to meet a two-year waiting period requirement and give proof that you will pay this time to get the loan. Also, some lenders don’t have a waiting period but require your assurance to pay back a loan.
PCS Orders Allow You to have Two VA Loans at The Same Time
PCS or Permanent Change of Station orders allow you to receive two VA mortgages at once. Since veterans often have to relocate due to job purposes, this forces them to leave their homes and find a new one in a new location. So, if you have to relocate under PCS orders, you can keep your current loan and apply for another VA loan. But when the market is stable, and you want to sell your old house, you can pay off your previous loan and only keep the new one.
How are Limits in Borrowed Money Affected if You Get a Second VA Loan?
Federal Housing Finance Agency (FHFA) has set the county’s conforming loan limit that decides your VA loan limit, but only when you already have a VA loan. If you want a second VA loan with no down payment, your total borrowing amount can’t exceed your county’s loan limit.
Frequently Asked Questions (FAQ)
Can I Buy Another House With a VA Loan or Have to Pay a Down Payment?
Yes, buying another home with VA home loans for an investment property or your second home is allowed. But there will be limits on entitlement, interest rates, and down payments.
Can You Have Two VA Loans in the Same Area?
No, because a veteran or active military is not entitled to have more than one VA loan in the same area or city.
Can I Use a VA Loan More Than Once?
Yes, if you get the approval of the loan under PCS orders or meet other requirements, you can easily get two loans.
How Many VA Loans Can You Have in a Lifetime?
There are no limits, and you can apply for loans throughout your life. You can have multiple VA loans simultaneously under certain conditions and eligibility criteria.
Does VA Loan require Private Mortgage Insurance (PMI)?
VA lenders don’t require PMI. However, you need to pay a VA funding fee with closing costs. This funding helps private lenders or VA mortgage lenders to keep offering the VA home loan programs to future borrowers.
Now, you probably know how many VA loans you can have. While you are eligible to apply for more than one loan, it’s better to discuss your requirements with an expert. They can help you figure out how you can qualify and help you get a loan.