How Many VA Loans Can You Have?

For many veterans and active-duty service members, VA loans represent a golden opportunity to achieve their dream of buying a VA home. These government-backed loans for eligible veterans or their surviving spouses come with favorable terms, such as zero down payment requirements and a competitive interest rate for your home purchase.

Many prospective homeowners wonder whether they can have more than one VA home loan while in their primary residence. The short answer is that yes, there are cases where a veteran or active-duty service member can have more than one VA loan. 

To better understand multiple VA loans, however, you need to understand the complexities of VA loan entitlement first. So, let’s get started and take a look at the world of VA loans to see the benefits you can get from this type of mortgage and how it will affect your money.

Understanding VA Loan Entitlement

VA home loans are backed by the Department of Veterans Affairs, which is why they come with such favorable terms. The Department of Veterans Affairs guarantees a part of your loan to the VA lender: if you default on your loan, the government will pay the lender the guaranteed portion.

At the heart of the VA loan program lies the concept of entitlement. This is the amount that the Department of Veterans Affairs guarantees on your loan, essentially promising to repay a portion of the loan if you default. 

If you’re looking for more information on how to apply for a VA loan or need guidance on how to leverage your entitlement for a second VA loan, the Department of Veterans Affairs is a great resource. Refinancing an existing VA loan is also an option for those who wish to reduce their monthly mortgage payment or access equity in their home. Buying a home as a second property with a VA loan is possible, as long as you meet the necessary criteria and understand how entitlement works. 

All VA loan programs must comply with equal housing requirements, ensuring that every eligible borrower has access to these benefits without discrimination.

Entitlement comes in two forms: full and reduced (also known as secondary or Tier 2).

Full entitlement

Full entitlement is set at $36,000 for most borrowers. As of 2024, this allows for a loan of up to $144,000 without a down payment, as VA lending guarantees 25% of the loan amount (25% of $144,000 is $36,000).

For home loans exceeding $144,000, bonus entitlement comes into play. This additional backing extends up to the conforming VA loan limit in most counties, which can significantly increase your borrowing power. Many lenders offer calculators that can help you determine your loan eligibility and calculate potential loan amounts. Additionally, obtaining a certificate of eligibility from the Department of Veterans Affairs is necessary to apply for a VA loan and access these benefits.

Reduced entitlement

Reduced entitlement comes into play when a veteran wants to use their VA funding fee benefit again while still having another VA loan or after having used the benefit previously without fully restoring their entitlement amount.

This situation is common for veterans who want to purchase a second home, perhaps due to relocation, while keeping their first property.

The amount of reduced entitlement available depends on the county loan limits where the new property is located and how much entitlement has already been used. To calculate it, take 25% of the county loan limit and subtract the amount of entitlement already in use.

For example, if the county loan limit is $766,550 and you’ve already used $100,000 of entitlement, your reduced entitlement would be:

(25% of $766,550) – $100,000 = $91,637

This remaining $91,637 of entitlement could be used to purchase another property.

One major aspect of reduced entitlement is that it may require a down payment if the purchase price of the new home exceeds the maximum amount that can be guaranteed with the reduced entitlement. This is different from using full entitlement, where no down payment is typically required.

Veterans can restore their full entitlement if they sell their home and pay off the VA loan in full, or if they refinance the VA loan into a non-VA loan and obtain a release of liability.

Scenarios for Having Multiple VA Loans

Contrary to what one might assume, it is possible to have more than one VA loan simultaneously.

Permanent Change of Station (PCS) Orders

Being in the military service often involves frequent relocations. If you’ve used a VA loan to buy a home and then receive PCS orders, you may be able to keep your current home as a rental property and use your remaining entitlement amount to buy a new home at your new duty station. This relatively common scenario allows service members to build equity in multiple properties over time.

Retaining a Property After Paying Off the Loan

If you’ve paid off a previous VA loan but haven’t sold the property, you may be eligible to use your restored entitlement to purchase another home. This situation could arise if you have decided to keep your first home as a rental investment or a vacation property.

Partial Use of Entitlement

If your first VA loan didn’t use all of your available entitlement (perhaps because you purchased a less expensive home), you may be able to use the remaining entitlement for a second purchase. This can be particularly useful in areas with lower housing costs, where your initial purchase may not have required your full entitlement.

Using Remaining Entitlement

The key to having multiple VA loans often lies in correctly utilizing your remaining entitlement.

Let’s say you used $100,000 of your entitlement to purchase a $400,000 home. If the current loan limit in your county is $766,550, you would have $91,637 of remaining entitlement (25% of $766,550 minus the $100,000 already used). This remaining entitlement could be used to purchase another property. Additionally, VA loan rates play a significant role in determining your monthly payments, so it’s important to consider how they affect your overall budget when applying for multiple loans.

Remember that having remaining entitlement doesn’t guarantee loan approval. Lenders will still evaluate your application based on standard criteria such as credit score, debt-to-income ratio, and residual income. Additionally, you’ll need to be able to afford the payments on multiple properties.

Multiple VA Loans

While the possibility of having multiple VA loans can open up real estate opportunities, you still need to approach this strategy thoughtfully.

Financial Responsibility

Each new VA loan represents an extra financial commitment. You should verify that you can comfortably manage multiple mortgage payments along with other living expenses.

Property Management

If you’re keeping a previous home as a rental, you will have all the responsibilities and costs associated with being a landlord, especially if you’re relocating to a different area.

Eligibility for Other Home Loan Programs

Having multiple VA loans may impact your eligibility for other types of mortgages, should you need them in the future.

Impact on Debt-to-Income Ratio

Additional loans will affect your debt-to-income ratio, which could influence your ability to qualify for future loans or credit.

You Can Have More Than One VA Loan

Are you facing a military relocation and need to buy a new home at your new location? You’ll be happy to learn that yes, it is possible to have more than one VA loan. However, it may not always be advisable!

So, talk to a VA-approved lender like Society Mortgage before deciding on a second VA loan. Our financial advisors will explain the complexities of multiple VA loans and explore your options for using your VA mortgage entitlements wisely and to your benefit.

The VA loan benefit can help people acquire multiple homes on the most favorable mortgage terms. However, multiple VA loans require careful planning and professional advice from an experienced VA-approved lender. Contact Society Mortgage to learn how this can work for you. We’ll be happy to help you understand the many VA loan benefits!