Disclaimer: The PCS Homegirls are not lenders. When using a VA loan, it is important to consult a knowledgeable lender with any questions pertaining to your particular situation. This article was written to help inform and educate military buyers and sellers and guide families to the appropriate resources.
One of the most common questions that we hear from 2nd time homebuyers is…..
Can we use the VA loan to purchase a second property? Well we are here to tell you that it is very possible! The simple answer to this question is yes, but it depends on a few factors. Lets dive in!
Using a VA Loan For A Second Time
As you may already know, if you do not currently own a home, there is no loam limit for a VA loan. BUT, lets pretend you already took advantage of the super low rates during/following COVID and purchased a home using the VA loan. You borrowed $405,800 to complete the sale of your very first property. You’ve lived in that home for 3 years and now its time to PCS. Instead of selling that home, you’d love to build generational wealth and are strongly considering holding on to the property and keeping it as a rental. You are moving to Ft Stewart and would like to purchase a new property….but is that even a possibility?
It sure is…and here is the breakdown.
Assuming everything is up to date and you are in good standing with your current loan, you can look into using the VA loan again. Because you do not have full entitlement (your current loan is using some of it), you need to calculate how much you have left over. The simple answer is yes, but it’s depends on a few factors. Let’s dive in!
Disclaimer: Everyone is different and it’s important to consult a knowledgeable lender to confirm your own situation.
Keep Your Current Home As A Rental
As you may already know, if you do not currently own a home, there is no loan limit. But let’s pretend you already own a home and purchased that home using the VA loan. Your borrowed $406,500 to complete the sale. You lived in that house for 3 years and would love to hold onto it as a rental property. You are moving to Ft Stewart and would like to purchase a new property….but can you?
YES!
Assuming everything is up to date and you are in good standing with your current loan, you can look into using the VA loan again. Because you do not have full entitlement (you have a loan for your home), you need to figure out how much of your entitlement is left over. First, look up the loan limit for your area. Hint: VA loan limits are based on county, can change yearly, and are found here. The Ft Stewart area has a loan limit of $806,500 for 2025. But what does this mean?
Lets make this make sense. Use this equation:
806,500 – what you’ve already used = Left over entitlement
So….
806,500 – 406,500 = $400,000 available entitlement
Great! So my limit on my next house is $400k?
Nope! You can borrow up to $400k without putting down money for a down payment! If you’d like to go over that amount (and you qualify with your lender) then you’d be responsible for putting down 25% of the overage.
Furthermore, if your new house cost $500,000 how much money would you need for a down payment?
$806,500 – $406,500 = $400,000
$500k (new purchase price) – $400k (entitlement) =$100k (over entitlement)
$100,000 x 25% = $25,000
If you owned a home with a loan of $406,500 and you purchased a second home in the amount of $500,000, you would need $25k for a down payment – keep in mind you still need to qualify for the loan! Likewise, if you owned a home for $406,500 and purchased a second home for $350,000, you would not be required to put money down because you have not maxed out your entitlement.
Keep in mind that you most likely won’t have enough entitlement to purchase a 3rd home. You CAN use the VA loan a third time…but in order to do so you may need to sell a property or pay off the loan to restore your entitlement.
Fun Facts
- You can use the VA loan as many times as you’d like, given you have enough entitlement.
- When using the VA loan you sign a form at closing agreeing to use the property as your primary residence and agree to occupy within 90 days.
- If you had a past foreclosure or a short sale, you may not have your full entitlement. Check with your loan officer for details.
- You can get your entitlement restored AFTER you sell your property and pay off the loan in its entirety.
- One reason why some people do not offer VA loan assumptions is because sometimes the seller does not get their full entitlement restored after transferring their loan to another buyer. This can negatively affect their ability to purchase another home to live in!
All in all, it’s possible to use a VA loan more than once…and even have 2 at the same time! Looking back, I wish I knew this before we sold our first home. Sadly not every agent knows the rule and can direct you to someone who does. Knowledge is power!! Informed borrowers ALWAYS have a better experience in buying and selling.
And that covers a basic understanding of VA loan entitlement and using two loans are the same time! How did we do? If you are still confused or need clarity, shoot us and email at hello@thepcshomegirls.com and we’d be happy to hop on a call to get you the answers you’re needing. Knowledge is power!
If you’re in the market for a new home, or you’d like to speak with an agent or lender about the possibility of purchasing again, don’t wait! Let us connect you with a one of our trusted and vetted military real estate agents that really know the market. Fill out our form to utilize our free service and take the guess work out of buying and selling.
