VA requirements

VA Loan Reader Questions: Restoration of VA Loan Entitlement

February 24, 2014

VA Loan Reader Questions: Restoration of VA Loan Entitlement

085-logoA reader asks, “I’ve paid off my VA loan. How long does it take to get my entitlement restored so I can buy a new home?”

VA loan entitlement restoration is not automatic–it must be applied for as per the VA official site at VA.gov. According to the official site, “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. 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.”

Borrowers who wish to have their entitlement restored can make the request through the VA Eligibility Center. This requires the borrower to fill out and submit VA Form 26-1880.

You’ll need proof that the original VA home loan was paid in full, the home was sold or other applicable documentation. Borrowers will also have to provide information about the branch of military service, dates of service, service number and other relevant information.

If you cannot locate the documentation of your loan payoff, home sale or other related (and required) paperwork, contact your lender for assistance. The VA will not be able to retrieve this documentation for you. When submitting, don’t send originals–you may need that paperwork again at some point.

The reader’s question about how long it takes to get entitlement restored? The answer depends on the VA workload, how the request for entitlement restoration is submitted, and whether or not the request was completed properly. There’s no set time frame for processing, but borrowers should apply for restoration as early as possible in the process for best results.

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

2 Comments
  1. Beverley Williamson

    My son is now medically retired from the Army. While active, he was stationed in WA where they purchased a home with a VA loan. After three years he was transferred to AZ and lived on post. They were unable to sell their house and had to do a short sale. Consequently they were 50k short. He is now out (after three years in AZ) and had been working with a VA lender to buy a house in OK. They were preapproved for 200k. They found a house, below that price, and proceed with loan process. A week before closing - after moving to OK from AZ and living with family waiting on closing - the loan company started asking for things not available and then told them could not close till they had. My son was in process of getting retirement set up and they wanted some type of pay stub that would not be available for a year. He is classified as temp disabled till they retest in a year at which time will change to perm. So they found a lender in OK who said they should never have been preapproved for that amount because of income/debt ratio. So they found a house for 127k. Now, closing is tomorrow and the VA is telling them they cant get their eligibility because of short sale and the fact that they still owe 50k. They made all their mortgage payment, plus rent for base housing. My question is why way till the 11th hour to tell them. My DIL is in tears. They are living at their sibling's house while kids live with me and go to school. Do they have no one they can complain to? Appeal to? Any recourse at all? I have looked at your newsletters and articles. You seem very knowledgeable.

    • Joe Wallace

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

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