VA Loan Entitlement Questions
In my last post we examined foreclosure issues as they relate to VA loan eligibility. You can’t get VA loan eligibility restored if you owe the government money because it paid off a claim on your VA mortgage–you must pay the government debt first. But what about owners who have purchased a home at some point and now want to buy again using any remaining entitlement?
It’s a question I am asked frequently; “I don’t have full eligibility for a VA loan, but I do have some entitlement left over. Can I use it for a new mortgage?”
According to the VA, “If a veteran has already used a portion of his or her eligibility and the used portion cannot yet be restored, any partial remaining eligibility would be available for use. The veteran would have to discuss with a lender whether the remaining balance would be sufficient for the loan amount sought and whether any down payment would be required.”
When a borrower doesn’t have enough remaining eligibility for a home loan even with a down payment, they can still use their remaining VA loan entitlement if they want to purchase a home with a co-borrower using his or her VA loan entitlement.
In cases where the co-borrower doesn’t have VA loan benefits, the non-military borrower can’t shoulder more of the financial burden for the loan than the veteran using his or her VA eligibility–something to keep in mind when applying with a co-borrower.
Military members who want to apply for VA loans together can use a combination of VA loan entitlements on the new mortgage. This is often called a “joint loan” and has more flexibility since the co-borrowers all have VA loan benefits to use for the purchase.