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Veterans who had a VA loan before may still have "remaining entitlement"
to use for another VA loan. The current amount of entitlement available
to each eligible veteran is $36,000. This was much lower in years past
and has been increased over time by changes in the law. For example, a
veteran who obtained a $25,000 loan in 1974 would have used $12,500 guaranty
entitlement, the maximum then available. Even if that loan is not paid
off, the veteran could use the $23,500 difference between the $12,500
entitlement originally used and the current maximum of $36,000 to buy
another home with VA financing. An additional $14,750, up to a maximum
entitlement of $50,750 is available for loans above $144,000 to purchase
or construct a home.
Most mortage companies require that a combination of the guaranty entitlement
and any cash down payment must equal at least 25 percent of the reasonable
value or sales price of the property, whichever is less. Thus, in the
example, the veteran's $23,500 remaining entitlement would probably meet
a mortgage company's minimum guaranty requirement for a no down payment
loan to buy a property valued at and selling for $94,000. The veteran
could also combine a down payment with the remaining entitlement for a
larger loan amount.
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.
Remaining entitlement and restoration of entitlement can be requested
through the nearest VA office by completing VA Form 26-1880. 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.
• 5 Steps to a VA Loan
• Financing Benefits
• Restoration of VA Loan Entitlement
• VA Loan Costs
• VA Loan Eligibility
• VA Loan Questions & Answers
• VA Loan Uses
• VA Offices
• Who is eligible for a VA Loan?
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