August 9, 2024

Ready to decode one of the most valuable benefits for veterans and active-duty service members? Today, we’re diving into VA loan entitlements and the ins and outs of using a VA loan twice—plus, we’ll break down the differences in funding fees and even give you some state-specific ranges where you can purchase with higher entitlement. Let’s get started!

VA Loan Entitlements

What Is a VA Loan Entitlement?

A VA loan entitlement is the amount the VA will guarantee on your loan. Essentially, it’s the VA’s promise to repay a portion of your loan to the lender if you default, which helps you secure better loan terms—like no down payment and competitive interest rates1.

How Do You Find Out Your Entitlement Amount?

To determine your entitlement amount, a VA lender needs to pull your Certificate of Eligibility (COE). The COE confirms your eligibility for a VA loan and shows how much of your entitlement is available. The amount you’re entitled to is geographically based, meaning it can vary depending on the housing costs in your area2.

Types of VA Loan Entitlements

There are two types of entitlements you should know about:

1. Basic Entitlement: This is the first level of entitlement, typically covering up to $36,000. With this, the VA guarantees up to 25% of your loan, allowing you to borrow up to $144,000 without needing a down payment3.

2. Bonus (or Secondary) Entitlement: If you’re looking to buy a home in a high-cost area or need a larger loan, the bonus entitlement kicks in. Combined with your basic entitlement, it allows you to borrow well beyond the initial $144,000, often up to or beyond conforming loan limits, depending on your location4.

State-Specific Entitlement Ranges

Your bonus entitlement is based on the county loan limits set by the Federal Housing Finance Agency (FHFA). Here are some examples of how much you might be able to borrow in a few different states:

• California: In high-cost areas like Los Angeles County, the loan limit can be as high as $1,089,3005.

• Virginia: In counties like Arlington, Fairfax, and Loudoun, you can borrow up to $1,089,300 with full entitlement6.

• Texas: While many areas have the standard conforming loan limit of $726,200, certain high-cost areas, such as Austin, can go higher7.

• Colorado: Counties like Denver and Boulder have loan limits up to $862,7008.

These limits allow you to purchase homes in these high-cost areas with no down payment, using your full entitlement.

Using a VA Loan Twice

Can You Use a VA Loan Twice?

Yes, you can! Whether you’ve paid off your first VA loan, sold the home, or still have your first home but want to buy another, using a VA loan multiple times is a possibility. Here’s how:

Reusing Your VA Loan Entitlement

You can reuse your VA loan entitlement in the following scenarios:

1. Full Entitlement Restoration: If you’ve paid off your VA loan in full and sold the property, you can apply to have your full entitlement restored, allowing you to use it again as if it were your first time9.

2. Partial Entitlement Restoration: If you still own your first home but want to buy another, you can use your remaining entitlement. This is common for military families who move frequently. Your new loan amount might be smaller, depending on how much entitlement you have left10.

3. One-Time Restoration: If you pay off your loan but keep the property, you can apply for a one-time restoration of your entitlement. This allows you to use your full entitlement again, even though you’re keeping the first home11.

Funding Fee Differences

Now, let’s talk about the funding fee. The VA funding fee helps keep the VA loan program running, and it varies depending on whether it’s your first time using the loan or you’re using it again.

First-Time VA Loan Users

For your first VA loan, the funding fees are as follows:

• No down payment: 2.15% of the loan amount for regular military, 2.4% for Reserves/National Guard.

• With down payment (5% or more): 1.5% of the loan amount.

• With down payment (10% or more): 1.25% of the loan amount12.

Subsequent VA Loan Use

If you’re using your VA loan benefit for the second time, here’s what you need to know about the funding fee:

• No down payment: 3.3% of the loan amount, regardless of military status.

• With down payment (5% or more): 1.5% of the loan amount.

• With down payment (10% or more): 1.25% of the loan amount13.

Funding Fee Waivers

Good news! If you’re receiving VA disability compensation, you may be exempt from the funding fee altogether. This exemption can save you thousands of dollars, so be sure to check if you qualify14.

Practical Tips for Using a VA Loan Twice

• Check Your Remaining Entitlement: Before applying for a second VA loan, check how much of your entitlement is still available. This will determine how much you can borrow.

• Consider a Down Payment: If your remaining entitlement isn’t enough to cover the new home you want, consider making a down payment to bridge the gap.

• Consult with a VA Loan Specialist: VA loans can get complicated when you’re dealing with entitlements and funding fees, so it’s a good idea to work with someone who knows the ropes.

🚨🇺🇸 Disclaimer: Consult with a VA Lender 🇺🇸🚨

I’m a real estate professional, not a lender, so it’s important to consult with a VA lender to get the most accurate and personalized information. Your VA lender will pull your Certificate of Eligibility (COE) and help you understand your specific entitlement based on your location and circumstances. Please note that all of this information is subject to change per the VA.

Recommended VA Lender

When it comes to securing a VA loan, you want a lender who’s not just knowledgeable but also deeply committed to guiding you every step of the way. That’s why I’m thrilled to introduce Logan Vargas, a dedicated loan officer with Presidential Mortgage. Licensed in all 50 states, Logan has earned a reputation for his exceptional communication and educational approach. He makes it his mission to ensure that every veteran and active-duty service member fully understands their loan options, helping them make informed decisions with confidence. Whether you're navigating the complexities of your first VA loan or looking to use your benefits again, Logan's expertise and unwavering support make him the perfect partner in your homebuying journey.

Logan Vargas @ ONE Presidential Mortgage

And there you have it! Whether you’re a first-time VA loan user or planning to use your benefit again, understanding entitlements, funding fees, and state-specific limits can help you make the best financial decisions for your future.

Your partner in all things real estate,

Ally

Have questions or want to share your experiences? Drop a comment below! ⬇️

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Article Sources

1. VA Loan Entitlements Overview ↩

2. Certificate of Eligibility (COE) Information ↩

3. Basic Entitlement Details ↩

4. Bonus Entitlement Explanation ↩

5. Los Angeles County Loan Limits ↩

6. Virginia Loan Limits ↩

7. Texas Loan Limits ↩

8. Colorado Loan Limits ↩

9. Full Entitlement Restoration Information ↩

10. Partial Entitlement Restoration Details ↩

11. One-Time Restoration of Entitlement ↩

12. VA Funding Fees for First-Time Users ↩

13. VA Funding Fees for Subsequent Loans ↩

14. Funding Fee Waivers for Disability Compensation ↩