3 min read VA Mortgage

Can I have more than one Veterans Administration (VA) mortgage?

Can I have more than one Veterans Administration (VA) mortgage?
Photo by Jessica Radanavong / Unsplash

Short Answer:

Yes. The Veterans Administration does not limit the number of VA mortgages a Active Duty, Veteran, National Gurad or Surviving Spouce may have. The only restriction to the number of mortgages is the amount of entitlement left for the borrower to use.

Longer Answer:

Last weekend, I got a call from a client looking to buy another home before selling their current home. The client shared that they knew they would have to use Conventional Financing as they already had a VA mortgage on their current home. During the conversation, I shared with the client that another VA mortgage might be possible depeneding upon how much of their entitlment they had left.

What is VA Entitlement?

To grasp how you can have more than one VA mortgage, you need to understand the concept of VA entitlement. Your VA entitlement is essentially the amount the VA will guarantee on your loan. There are two types of entitlement: basic and second-tier aka Bonus entitlement. You can find your entitlement on your Certifcate of Elgibilty (COE):

  1. Basic Entitlement: This is typically $36,000. For loans up to $144,000, the VA will guarantee 25% of the loan amount.
  2. Second Tier Entitlement: For loans over $144,000, the VA provides additional entitlement, which can be used to purchase another primary home if you have remaining entitlement.

Scenarios Where You Can Have More Than One VA Mortgage

  1. Remaining Entitlement: If you haven't used all of your entitlement on your first VA loan, you can use the remaining entitlement to purchase another home. For example, if you bought a home for $200,000 and used $50,000 of your entitlement, you may still have enough entitlement left to buy another property.
  2. Second-Tier Entitlement: Even if you've used your basic entitlement, you may still qualify for a second-tier entitlement. This can be particularly useful if you need to relocate but want to keep your first home as a rental property. The second-tier entitlement allows you to purchase another home without selling your first one.
  3. Refinancing: If you refinance your first VA loan into a non-VA loan, you can restore your full VA entitlement, making it available for another VA mortgage.

Key Considerations

  • Occupancy Requirements: The VA requires that the property you purchase with a VA loan be your primary residence. This means you can't use a VA loan to buy a vacation home or rental property.
  • Funding Fee: If you use your VA entitlement for a second time, you may be subject to a higher funding fee unless you are exempt due to a service-connected disability.
  • Qualification: You will need to be able to qualify for the new house mortgage payment; on top of the departing residence's monthly housing payment.

Down Payment Required?

If you do not have enough remaining entitlement to cover the full loan amount for your new primary residence, you may be required to make a down payment. The down payment will typically be 25% of the difference between the loan amount and the remaining entitlement.

Conclusion

Yes, it is possible to have more than one VA mortgage at a time, thanks to the VA's entitlement system. The VA (Veterans Affairs) mortgage program is a fantastic benefit for eligible veterans, active-duty service members, surviving spouces and certain members of the National Guard and Reserves. It offers competitive interest rates, no down payment options, and no private mortgage insurance (PMI).

Whether you have remaining entitlement or qualify for second-tier entitlement, the VA loan program offers flexibility for veterans and service members looking to purchase a new primary residence.

Trying to figure out how much entitlement you have left to purchase another primary residence, I am happy to help. Reach out to me at teamjd@mainstreethl.com

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These blogs are for informational purposes only. Make sure you understand the features associated with the loan program you choose, and that it meets your unique financial needs. Subject to Debt-to-Income and Underwriting requirements. This is not a credit decision or a commitment to lend. Eligibility is subject to completion of an application and verification of home ownership, occupancy, title, income, employment, credit, home value, collateral, and underwriting requirements. Not all programs are available in all areas. Offers may vary and are subject to change at any time without notice. Should you have any questions about the information provided, please contact me.