VA loans

VA Loan Eligibility Restoration: A Reader Question

June 30, 2014

VA Loan Eligibility Restoration: A Reader Question

098-logoA reader asks, “I recently sold my house that was purchased with a VA loan. Do I need to do anything to restore my eligibility for a future purchase?”

The VA official site has the answer and resources to help borrowers in this situation get their VA loan eligibility restored to 100% where applicable. According to VA.gov:

“Veterans can have previously-used entitlement ‘restored’ to purchase another home with a VA loan if:

  • The property purchased with the prior VA loan has been sold and the loan paid in full, or
  • A qualified Veteran-transferee (buyer) agrees to assume the VA loan and substitute his or her entitlement for the same amount of entitlement originally used by the Veteran seller.”

Furthermore, borrowers who have paid off their home in full may keep the home and apply, on a one-time basis, for 100% VA loan restoration. According to VA.gov:

“The entitlement may also be restored one time only if the Veteran has repaid the prior VA loan in full, but has not disposed of the property purchased with the prior VA loan.”

In all cases, borrowers will need to fill out VA paperwork (see below) and submit proof that the home has been paid in full. VA loan entitlement restoration is never automatic and borrowers should never assume the VA has copies of loan paperwork that is paid in full or still in the process of being paid off.

To get your VA loan entitlement restored after paying off your VA mortgage in full, the VA official site says:

“Remaining entitlement and restoration of entitlement can be requested through the VA Eligibility Center by completing VA Form 26-1880.

Do you have questions about VA home loans or refinance loans? Ask us in the comments section.

Bruce Reichstein

About Bruce Reichstein

Bruce Reichstein is an Expert on (VA) Military/Veteran Home Loan Guidelines for over 26 years. He is an experienced VA Loan Mortgage Banker who is passionate about assisting US Military Veterans utilize their Veteran Eligibility to purchase a home.

4 Comments
  1. Michael Watson

    I'm a 100% disabled veteran with a va approved loan. I'm wanting to purchase a new home and I need some direction in finding out if my current loan is assumable.

    • Joe Wallace

      VA home loans can be assumed with the participation of the lender--you'll need to discuss the loan assumption process with your loan officer to learn what might need to be done to get started.

  2. Rodney Brunet

    Once the form is filled out and proof of home sold of prior loan. What is the fastest way to get information to the VA center and how long will it take to get loan entitlement restored? Thank You Rodney

    • Joe Wallace

      Contact the VA directly for assistance by calling 1-800 827-1000.

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