Many veterans are not aware that they can qualify for more than one Veterans Administration loan at a time, depending on circumstances. They can take solace in the fact that many lenders are also not aware of this situation.
The VA loan limit for veterans who wish to buy real estate is $417,000. This is the base amount—the limit may be higher in areas where housing prices are more expensive. Here in Colorado’s El Paso and Teller counties, the $417,000 limit applies; in our neighbor to the north, Denver County, it is $425,000. The loan limits are reevaluated every year.
When considering a VA loan, many veterans start by going online at the Veterans Information Portal for their Certificate of Eligibility (COE). If you are applying for your first VA home loan, your entitlement is for a mortgage of $417,000, assuming that you have adequate income and credit to qualify.
VA entitlement has two parts: basic and bonus. If you have not previously applied for a VA loan, your basic entitlement is $36,000—that is the amount the government insures—but is is not necessarily the total amount of the loan for which you are eligible. Lenders will generally loan up to four times your available entitlement without your having to pay a down payment. So if your basic entitlement is $36,00 you are entitled to $144,000 ($36,000 x 4) providing that your income and credit meet the lender’s requirements. Bonus entitlement comprises a loan up to an additional $68,250 x 4 ($273,000). This amount, sometimes referred to as Tier 2 or additional entitlement, is used only for VA loans between $144,000 and the conforming limit of $417,000.
Here are some examples of how veterans can apply for multiple VA loans. If they buy a home for $200,000 and then receive orders to relocate, they are eligible to apply for the remaining $217,000 with 100% financing to purchase a home at their new base. If the home at the new base is $300,000, they can apply for the additional $83,000 if they put down 25% of that amount ($20,750).
If you have a lease in place for your existing home before you move, that amount will be credited to your income you apply for a loan at your new base.
Coming soon: Can you get a VA loan after a foreclosure?