Multiple VA loans to the same borrower

Multiple VA loans to one borrower. Are you sure about that?

Yes, I am positive and have closed these transactions. Many veterans (and, frankly, loan officers) are not aware that it is possible for borrowers to have multiple VA loans at once. It is not common, but that could be due to the fact that not many people are aware of the possibility.

How does it work?

Each eligible veteran has a certain amount of entitlement. This amount is typically listed on a veteran's certificate of eligibility (COE). As a lender, I have access to the web portal to obtain a veteran's COE within minutes, so if you are unsure or would like to see if you are eligible, please call or email me or fill out my contact form.

The amount of entitlement is equal to 1/4 of the conforming loan limit in the property county, minus any entitlement that is currently in use. In Arizona, the conforming loan limit is $417,000 for all counties, so veterans are eligible for $104,250 in entitlement here in AZ. This entitlement is broken up into two categories, basic and second tier. Basic entitlement is $36,000 and is used for loan amounts equal to or less than $144,000 ($36,000 x 4). Second tier entitlement is used for loans over $144,000.01 and is the primary reason a second VA backed loan may be available to a veteran.

What is the most common situation that would allow for more than one VA loan to a veteran?

Since VA purchase loans are for primary residences only, a veteran seeking a second VA loan could only do so on a new home that will be owner-occupied.

In most cases where a veteran qualifies for more than one VA backed loan, the veteran has moved from a prior residence, but continues to own and rent the original home with a VA loan attached to it. If this is the case, the veteran is free to use any remaining entitlement on a new primary residence home purchase.

An example: Scott is a veteran and owns a home in Phoenix, AZ. The home has a VA loan on it for $200,000 and Scott has $50,000 of his available entitlement wrapped up in the property. Scott has recently moved to Denver, CO and will be renting the Phoenix home to someone else. Scott would qualify for another VA loan amount of up to $217,000 in Denver with no down payment or even higher if he had some money to put down on the home. $217,000 is 4 times his remaining entitlement ($54,250). His original entitlement of $104,250, minus the $50,000 he has wrapped up in the Phoenix property, or $54,250. 

It is worth stressing the fact that a borrower is able to add down payment funds to increase the loan amount available to them (up to county limits).

Questions?

It's a lot to take in. If you would like to review your available entitlement or request your certificate of eligibility, just call me at 480-368-7715 or contact me and I'll walk you through things.

Thanks for reading my blog!

Website: VA mortgages in Arizona

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