VA Loan on 2 Homes at Same Time
For you veterans and active duty service members out there thinking about using the VA home loan benefit, this is for you. The VA home loan entitlement is what guarantees the loan for you so you don't have to make a down payment.
VA entitlement is generally going to be around 25% of the loan amount. If the home loan needed is $200,000 then the VA will guarantee 25% of that or ($50,000). Eligible veterans in most parts of the country have a primary entitlement amount of $36,000 and an additional secondary entitlement (also referred to as second tier entitlement) of $145,550. Adding those two numbers together, you have a total VA entitlement available of $181,500.
If you already have a VA loan on a home and you're debating on selling it, hold fast! You may have the option to purchase another home with $0 down payment by using your VA 2nd tier entitlement. This means that you will be leveraging the remaining amount of entitlement that you have available as long as you're going to live in that home as your primary residence.
Eligibility Requirements of a VA Home Loan
Service Member Requirements (at least one of the following):
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Must have served at least 90 consecutive days of active service during wartime
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Must have served at least 181 days of active service during peacetime
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Must have served at least 6 years in the National Guard or Reserves unless proof of at least 90 days of active service under Title 32 orders
Spouse of Service Member Requirements:
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Must be the spouse of a service member who died while serving or died due to a VA service-connected disability.
Every scenario is different, so it's not necessarily going to be a guarantee that this can happen every time. Contact your trusted local VA-experienced lender because they need to calculate some numbers for you.
1. How much entitlement are you currently using on your home
2. Calculate how much entitlement you have remaining to be able to purchase a second home without having to make a down payment
If the first home that you purchased was $200,000, then you would have used $50,000 in VA loan entitlement. Subtract the $50,000 of entitlement that you have used from the total maximum guarantee that the VA provides of a $181,500. that means you have $141,550 in remaining VA home loan entitlement. Multiple $141,500 by 4 = $526,200.
This means that you may be eligible to purchase a second home without selling the current home and you could qualify for up to $526,200 with $0 down payment.
This is how you can have two VA loans out at the same time.
Example:
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1st Home Purchase Price: $200k
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Down Payment: $0
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Home Loan Amount: $200k
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VA Entitlement Needed: $50k (25% of $200k)
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2nd Home Purchase Price: $499k
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Down Payment: $0
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Home Loan Amount: $499k
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VA Entitlement Needed: $124,750 (25% of $499k)
Will This Work? Let's Find Out...
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Total Available Entitlement: $181,500
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Entitlement Used: $50,000 (25% of $200k)
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Entitlement Needed: $124,750 (25% of $499k)
Total Entitlement Needed for Both Homes:
$50,000 + $124,750 = $174,750
Total entitlement needed of $174,750 is LESS than total entitlement available of $181,500.
This will work!
3 Primary Benefits of the VA Home Loan
$0 Down Payment
No Private Mortgage Insurance
Lifetime Benefit
To verify eligibility, your lender may need a copy of your Form DD-214, Statement of Service, Retirement Points Statement, or other proof of qualifying service history.
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