Multiple VA Home Loans Mortgage Lending Guidelines

BySapna

In this article, we will discuss and cover multiple VA home loans mortgage lending guidelines. As we enter the spring season, real estate activity increases across the United States. Many families are buying and selling homes during the spring season. A few reasons this season is busy are, families getting their children set up for the following school year, moving while the weather is nice, coming out of the winter fog. During the spring season, we see real estate inventory skyrocket and real estate transactions increase.

Can I Use VA Entitlement More Than Once

Many of our veterans have been calling Gustan Cho Associates to see if they qualify to purchase a home. I have noticed an increase in veterans asking if they can use their VA loan again. The short answer is yes, you can use it as many times as you would like. In this blog,  we will discuss Multiple VA Home Loans and how it works.  We will detail how to use your VA loan more than once and cover Multiple VA Home Loans scenario where you may have more than one VA loan at one time.

Multiple VA Home Loans With Entitlement

Assuming you meet VA loan guidelines and are eligible to purchase a new property, there are a few ways to restore your VA entitlement. The most common way to reuse a VA loan is to simply sell the current home that is financed with a VA loan. The reason I say this is the most common way entitlement is restored is, many veterans sell their current home and utilize those proceeds to move into their next home.

How Does Using Your VA Loan More Than Once Work

Once you sell the current home with the VA loan, your full entitlement is restored because that VA loan is paid in full. At this point, the following VA FORM is filled out to restore entitlement. Since your VA loan is assumable, you may sell the home to somebody where your mortgage currently stands. Meaning you can sell the home to somebody and they can pick up your loan right where you leave it off. If you let a non-veteran assume the loan, your entitlement may not be restored. If a veteran assumes your current loan, their entitlement will be used and yours will be restored.

Is It Possible To Have Multiple VA Home Loans At The Same Time

The main topic I would like to cover in this blog is having Multiple VA Home Loans at the same time. Multiple VA Home Loans is possible but there are a few moving parts to accomplish this. In 2021, a veteran with full entitlement (basic entitlement – $36,000 PLUS second entitlement $85,087= Total entitlement of $121,087) has enough VA guarantee for a loan amount of $647,200 in most counties across the nation. The average VA loan in 2021 was around $415,000 which leaves some entitlement remaining on the veteran’s home loan benefits. This remaining entitlement may be used to purchase another home with the VA loan, assuming you need to move for military reassignment. If you have enough entitlement remaining, you may not need a down payment. A permanent change in the station is the only way for this second VA loan to work.

Relocation To Another Station

Since you purchased your current home finance with a VA loan with the intent of this being your permanent residence and you have received orders for a permanent change in station, you are allowed to rent out your current home and purchase a new one with your remaining VA entitlement.

Example:

  • You own a home in Colorado Springs with a VA loan
  • You financed $160,000 on this home
  • The VA guarantees 25% of the loan amount or $40,000
  • You are currently using $40,000 of your entitlement
  • Since your total entitlement is $121,087 and you are using $40,000, you have $121,087 of entitlement remaining
  • Since the VA will guarantee 4 times your entitlement, you can finance a home up to $324,348 (without a down payment)
  • With a down payment, you can purchase a home above $324,348.
  • Since you received permanent changing station orders in San Antonio Texas, you can use your VA benefits to buy a home in Texas

In order to offset the mortgage payment on your home in Colorado Springs, you will need to rent out the home and provide an executed lease agreement. Any additional rental income may not be applied to the purchase in San Antonio Texas, but it will offset the mortgage payment from your debt to income ratio.

Starting Multiple VA Home Loans Lending Process

How to start the next VA loan?

Gustan Cho Associates are experts in VA mortgages. We are a full-service lender without any LENDER OVERLAYS and are able to help more clients than most. Below are the documents you need to gather to start the mortgage process.

  • Last 60 Days Bank Statements – to source money for escrows
  • Last 30 Days Pay Stubs
  • Last Two Years W2’S
  • Last Two Years Tax Returns
  • Driver’s License
  • Certificate of Eligibility
  • Current Mortgage Statement
  • Homeowners Insurance Information

Once you gather those documents please call Mike Gracz on (800) 900-8569 or text us for faster response. Or send an email to gcho@gustancho.com. We are available 7 days a week, mornings and evenings. We pride ourselves on being up to date on all mortgage guidelines. Either Mike or one of his highly trained and skilled loan officers will help you purchase your next home. We look forward to hearing from you.

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