Maximizing Your VA Loan: How to Use Your Benefits More Than Once

For many Veterans and active-duty service members, the VA loan provides a path to homeownership without the financial barriers of a traditional loan. What many don’t realize is that VA loan benefits aren’t limited to a one-time use. In fact, eligible Veterans can use their VA loan benefits multiple times, even while they still own a home financed with a VA loan. Understanding how to reuse your VA benefits can help you buy, sell, and invest in real estate more effectively.

Here’s what you need to know about reusing your VA loan benefits and how you can make the most of this valuable resource.

Can You Use Your VA Loan More Than Once?

Yes! Veterans can reuse their VA loan benefits as many times as they need, as long as they meet certain eligibility criteria. Whether you’ve paid off your previous VA loan or still own a home financed with one, your benefits remain available. This makes the VA loan a flexible option for homebuyers and real estate investors alike.

How Reusing Your VA Loan Works: The Entitlement Concept

The key to understanding how you can reuse your VA loan lies in the concept of entitlement. When you first use a VA loan, a portion of your entitlement is tied up in that property. However, there are two ways to regain entitlement so you can use the VA loan again:

1. Restoring Full Entitlement: If you’ve sold your previous home and paid off the VA loan, your entitlement can be fully restored, allowing you to use the VA loan for your next home purchase. This process is straightforward and available as many times as needed. To restore full entitlement, you’ll need to submit a request through the VA Form 26-1880, which is an application for a Certificate of Eligibility (COE).
2. Partial Entitlement: In cases where you still own a home financed by a VA loan but want to purchase another property, you may be able to use partial entitlement. This is useful for Veterans who are relocating or purchasing a second home. However, when using partial entitlement, loan limits may apply, and you could be required to make a down payment depending on the price of the new home and the remaining entitlement.

Common Scenarios for Reusing Your VA Loan Benefits

There are several scenarios where you might need to use your VA loan benefits more than once:

1. Upgrading or Downsizing: Many Veterans who purchase a home early in their careers may choose to upgrade to a larger home as their family grows or downsize after retirement. By selling the original home and paying off the loan, you can restore full entitlement and apply for a VA loan on your next property.
2. Relocating: If you’re relocating due to a job change or military assignment, you may choose to keep your current home as a rental property and purchase a new home in your new location. Using partial entitlement, you can take advantage of your VA benefits to finance the new property.
3. Refinancing with a VA Loan: If you’ve already used a VA loan but want to refinance your current mortgage, the VA Interest Rate Reduction Refinance Loan (IRRRL) offers a simple way to lower your interest rate or adjust the loan term without needing to restore your entitlement.

Are There Limits to Reusing Your VA Loan?

While there are no hard limits on how many times you can use your VA loan benefits, certain conditions apply each time:

• VA Funding Fee: Each time you reuse your VA loan benefits, a funding fee applies, which is typically higher for subsequent uses. The funding fee helps keep the VA loan program running and is based on the loan amount and whether you make a down payment. First-time VA loan users pay a funding fee of 2.3% with no down payment, while repeat users pay 3.6%. However, Veterans with a service-connected disability may be exempt from paying the fee.
• Occupancy Requirement: The home you purchase with a VA loan must be your primary residence, meaning you intend to live there full-time. While you can use the loan for multiple homes over your lifetime, each one must be your primary residence at the time of purchase.

Advantages of Reusing Your VA Loan Benefits

Reusing your VA loan offers significant advantages for Veterans and active-duty service members, including:

• No Down Payment: Even with repeated use, the VA loan continues to offer zero down payment options, making home purchases more affordable.
• Lower Interest Rates: VA loans typically offer lower interest rates than conventional loans, even when you reuse the benefit.
• No PMI: Whether it’s your first home or your third, VA loans do not require private mortgage insurance (PMI), even if you’re putting no money down. This translates to long-term savings.

How to Start the Process

If you’re ready to reuse your VA loan benefits, the first step is to confirm your eligibility through a Certificate of Eligibility (COE). This document verifies your entitlement and can be obtained by submitting VA Form 26-1880. Once you’ve confirmed your eligibility, you can move forward with the process of either restoring your full entitlement or using partial entitlement to buy your next home.

Whether you’re upgrading, relocating, or investing, the VA loan can help you reach your homeownership goals again and again.

Call to Action

Thinking about using your VA loan benefits again? Contact Katita Slemp at Idaho Bliss Realty Partners today at (208) 891-1222 to explore your options and learn how to make the most of your VA loan benefits. Whether you’re upgrading, relocating, or refinancing, Katita can guide you through the process and help you secure the home of your dreams.

For more information, visit the Idaho Bliss Realty Partners.