You may have used a VA loan in the past. You may be contemplating using one for your home purchase. Or, maybe you’re thinking ahead to some point in the future. Whatever your situation, you might be wondering, “How many times can you use a VA loan?” After all, the loans from the U.S. Department of Veterans Affairs (VA) home loan program are famous for their favorable terms, so if you can only use them once, you’ll want to make sure that you this housing benefit wisely. Fortunately, if you’re eligible for a VA loan, you’re likely to be pleased by the answer.
How Many Times Can You Use a VA Loan?
So, how many times can you use a VA loan? That depends on you. As The Mortgage Reports explains, the VA awards each eligible service member or veteran a certain amount of entitlement for their service. Taking out a VA loan ties up some or all of that entitlement. The larger your loan, the more of your entitlement it will consume. However, there are two facts to remember. First, your entitlement can be restored. Second, as long as you remain eligible and have sufficient entitlement, you can get another VA loan. Therefore, the number of times that you can use a VA loan depends on how you choose to use your entitlement. It’s also worth noting that the VA loan program doesn’t just offer purchase loans – you can also refinance with a VA loan.
Restoring Your Entitlement
If you’ve never used a VA loan before, you’ll have your full entitlement. As Military.com explains, if you’ve already used a VA loan, there are three common scenarios that may allow you to restore your entitlement so that you can use it for a VA loan:
- You’ve paid off your previous VA loan. You may be enjoying living in a home that is 100-percent yours after paying the final loan payment. Or, you may have sold the home and used the proceeds to pay off the loan before relocating. Whatever the reason, when you pay off a VA loan, you can complete VA Form 26-1880 to have your entitlement restored. Once your request is processed, you’ll be ready for the next time you want to use a VA loan.
- Your previous VA loan was assumed. If you sell a house that you purchased with a VA loan to an eligible buyer who opts to use their own VA entitlement to assume the loan, then you’ll be free to have your entitlement restored. However, if the buyer who assumes the mortgage doesn’t have enough entitlement of their own or isn’t eligible for a VA loan, then your entitlement must remain with the loan until it is paid off.
- You have remaining entitlement. Even if some of your entitlement has been used by another loan, you may have entitlement remaining to qualify for a second VA loan.
Refinancing with a VA Loan
If you’re totaling up the number of times you can use a VA loan, don’t forget the possibilities offered by the VA’s refinancing options:
- Interest Rate Reduction Refinance Loan (IRRRL): Also called the streamline refinance, an IRRRL allows you to refinance an existing VA loan on a property that either is or previously was your primary residence. This loan reuses your entitlement and often allows you to skip over some of the paperwork. For example, a VA appraisal is generally unnecessary. As a result, the process is quicker, easier, and less expensive for borrowers. However, it’s only an option for borrowers who already have a VA loan and who are uninterested in cashing out their equity.
- VA Cash-Out Refinance: If you want to turn some of your home equity into cash to use for renovations, schooling, investing, or debt payments, then you may be more interested in a VA cash-out refinance. This loan is also an option for someone who wants to turn a non-VA loan into a VA loan. To qualify, you’ll need to be eligible for a VA loan, have the credit and income necessary to secure the loan, and be planning to use the property as your primary residence.
Using a VA loan can be an excellent way to make your housing dreams a reality. PrimeLending Twin Cities can help. We understand all the ins and outs of the VA loan program, and we’re ready to put our experience to work to assist you. Contact us today to get started.