Can You Have Two VA Loans At The Same Time?

Table of Contents

• Key Takeaways
• Introduction
• Can You Have Multiple VA Loans?
• Why Would Someone Want Multiple VA Loans?
• Understanding VA Entitlement and Foreclosures
• Bonus Entitlement and Loan Size Considerations
• How to Calculate Your VA Entitlement
• Summary and Final Thoughts
• Frequently Asked Questions (FAQ)
• Contact Information

Key Takeaways

• It is possible to have multiple VA home loans simultaneously, typically two or more, provided you qualify for the payments and have sufficient VA entitlement.
• Multiple VA loans are often used strategically during transitions, such as buying a new home before selling the old one, making the moving process smoother.
• Renting out a previous primary residence with a VA loan is allowed and can help offset mortgage payments or generate rental income.
• VA foreclosures impact your remaining entitlement, but you can clear or manage this entitlement to qualify for new VA loans.
• Bonus entitlement allows for larger loan amounts but has a minimum loan size requirement; understanding your entitlement is crucial before applying.
• A free VA entitlement calculator is available to help determine your borrowing power and down payment requirements.

Introduction

Many Veterans and active-duty service members wonder if it’s possible to have more than one VA home loan at the same time. As someone who’s guided countless clients through the VA loan process, I’m here to tell you that yes, you can have multiple VA loans simultaneously. However, there are important factors to consider, including qualification criteria, VA entitlement, and strategic reasons for having more than one VA loan.

In this article, I’ll break down why you might want multiple VA loans, how VA entitlement works, and what you need to know to make the best decision for your financial future. Whether you’re relocating, investing, or managing your housing situation, understanding these details is key to leveraging your VA loan benefits effectively.

Can You Have Multiple VA Loans?

The short answer is yes — you can have two or more VA loans at the same time. Typically, most people have up to two VA loans concurrently, but there are situations where more than two are possible. The critical requirement is that you must qualify for all the mortgage payments on these loans. Lenders will look at your income, credit, debt-to-income ratio, and other factors to ensure you can handle the financial responsibility.

If you have rental income from a property you own, that income can be used to help qualify for additional loans by offsetting mortgage payments. This flexibility can make holding multiple VA loans more manageable.

Why Would Someone Want Multiple VA Loans?

Buying Before Selling: Making the Move Easier

One common reason Veterans want multiple VA loans is to ease the transition between homes. The VA requires that the loan be used for your primary residence. But what happens if you need to buy a new home before you sell your current one? Holding two VA loans temporarily can make this process smoother.

Instead of having two closings simultaneously, which can be complicated and stressful, you can buy your new home first using a VA loan, then sell your old house afterward. This approach streamlines your move and reduces the hassle of coordinating sales and purchases on the same day.

Of course, you must qualify for both mortgage payments during this period, and you need enough VA entitlement to support two loans. But if those conditions are met, this strategy is a great option to consider.

Renting Out the Old House

Another frequent scenario involves renting out your previous home. Once you’ve moved to a new primary residence, you’re allowed to rent out the old house. This is especially common among military families who PCS (Permanent Change of Station) frequently. Instead of selling a home, they convert it into a rental property, generating steady income over time.

My grandfather’s story is a perfect example. Stationed at Keesler Air Force Base in Biloxi, Mississippi, during the 1950s, his family kept their home as a long-term asset. They PCSed around the country for over 20 years, renting out the house during that time. When they retired, they reclaimed their original home in Mississippi and enjoyed the stability and investment they had built.

Keeping your old home as a rental can be a smart investment strategy, helping you build wealth and potentially increasing your financial security.

Understanding VA Entitlement and Foreclosures

What is VA Entitlement?

VA entitlement is the amount the Department of Veterans Affairs guarantees when you take out a VA loan. It essentially protects the lender and allows Veterans to borrow without a down payment up to a certain limit. Your entitlement resets or replenishes when you sell a home and pay off the VA loan, but when you have multiple loans, your entitlement needs to cover all.

If you have used your entitlement on a previous home and still own it, or if you have VA foreclosures on file, your remaining entitlement may be reduced. This affects how much you can borrow with zero down on a new VA loan.

What Happens If You Have a VA Foreclosure?

Foreclosures filed on a VA loan create a VA claim against your entitlement. This claim reduces your available entitlement for future VA loans. If you have a foreclosure on file, you’ll need to determine how much entitlement remains and whether you can qualify for additional VA loans.

One way to manage this is by clearing your entitlement, which involves settling the claim against your entitlement from the foreclosure. This process can restore your ability to use your VA loan benefits fully again.

Alternatively, you can calculate how much entitlement you have remaining and proceed accordingly, accepting that your available entitlement is reduced by the foreclosure claim.

Bonus Entitlement and Loan Size Considerations

Bonus entitlement is an additional amount of VA entitlement available to Veterans, allowing them to borrow larger amounts without a down payment. However, there is a minimum loan size requirement for bonus entitlement: $144,000. This is especially relevant today as most real estate prices exceed this figure.

When purchasing a smaller home, bonus entitlement may not come into play, but if you’re buying a more expensive property, understanding your bonus entitlement can help you maximize your VA loan benefits.

How to Calculate Your VA Entitlement

Figuring out your exact available entitlement can be complex, especially when managing multiple VA loans or previous foreclosures. To simplify this, I created a free VA Entitlement Calculator available on my website at scarpero.com.

This online tool lets you input your current loan information, entitlement usage, and other details to determine your maximum borrowing power with zero down. It also tells you if you’ll need a down payment and how much, if your loan amount exceeds your entitlement.

Using this calculator can save you time and help you make informed decisions before applying for multiple VA loans.

Summary and Final Thoughts

Having multiple VA loans at the same time is not only possible but can be a valuable tool for Veterans who need flexibility when buying, selling, or investing in real estate. The key is understanding your financial qualifications and VA entitlement limits.

Whether you’re buying a new home before selling your current one, renting out your old house for income, or recovering from a VA foreclosure, there are strategies to help you make the most of your VA loan benefits.

Remember to use tools like the VA Entitlement Calculator to clarify your borrowing capacity and entitlement status. And if you have questions or need personalized advice, don’t hesitate to reach out to a VA loan expert who can guide you through the process.

Frequently Asked Questions (FAQ)

Can I have more than two VA loans at the same time?

Yes, while typically Veterans have up to two VA loans concurrently, it is possible to have more than two if you qualify for all payments and have sufficient VA entitlement. Each situation is unique, so it’s important to evaluate your financial situation carefully.

Do I have to live in the home I use a VA loan to buy?

Yes, the VA requires that the loan be used for your primary residence. However, once you move out, you can rent out the property, especially if you’re relocating or PCS’ing.

How does renting out my old home affect my VA loans?

Renting out your previous home is allowed and can help offset mortgage payments. Rental income can also be used to qualify for additional VA loans, making it easier to manage multiple properties.

What impact does a VA foreclosure have on my entitlement?

A VA foreclosure creates a claim against your entitlement, reducing the amount available for future VA loans. You can clear this entitlement by settling the foreclosure claim or calculate your remaining entitlement to understand your borrowing capacity.

What is bonus entitlement and how does it affect my VA loan?

Bonus entitlement is an additional amount of VA entitlement that allows Veterans to borrow larger loan amounts without a down payment. There’s a minimum loan size of $144,000 to use bonus entitlement, which is usually not an issue with today’s real estate prices.

Where can I find a tool to calculate my VA entitlement?

You can use the free VA Entitlement Calculator by clicking here. This tool helps you determine your maximum loan amount and down payment requirements based on your current VA loan status and entitlement.