Anyone who has used a VA loan in the past to purchase their primary residence knows what great benefits they contain for homebuyers.
From low-interest rates to the elimination of private mortgage insurance and (most significantly) no need for a down payment—it’s easy to see why VA home loans are popular with veterans.
But what about your second home? Or even your third? If you’ve already used a VA loan for a home purchase, you might wonder if you can use VA home loans for a new home.
So, how many times can you use a VA loan? To find out, we have to consider how VA loan benefits work.
How does a VA loan work?
A VA home loan is a particular type of mortgage guaranteed by the United States Department of Veterans Affairs (VA).
It’s designed exclusively for military borrowers who want to buy a home or refinance a mortgage with an interest rate reduction refinance loan (IRRRL).
At first glance, VA mortgage loans may look like any traditional type of loan.
After filling out an application, your mortgage lender will check for proof that you can meet the monthly payments and closing costs based on your credit score, savings, and earnings.
But there are some significant differences between non-VA loans (like FHA loans) and VA loans—particularly regarding how they deal with fees and costs.
What are the primary criteria for VA mortgages?
VA home loan benefits were created for active service members and veterans (or their spouses) who have met the Department of Veterans Affairs’ minimum service requirements.
The VA home loan benefit is only for military borrowers that have served enough time to meet eligibility requirements. An applicant must also have a valid Certificate of Eligibility (COE) and meet the lender’s credit and income requirements.
To be eligible for a new VA loan, you have to meet at least one of the following requirements of military service:
- Served at least 90 consecutive days of active service—specifically during wartime
- Served—in peacetime—at least 181 days of active service
- Served six years, minimum, in the Reserves or National Guard
- A military service member’s spouse, if the member passed away in the line of duty or because of a service-connected disability
The benefits of a VA mortgage loan
Once you determine that you’re eligible for a VA loan, let’s look at some benefits and some potential cons of the VA mortgage loan.
No mortgage insurance
Most loan programs with low-to-no downpayment options will insist on mortgage insurance. Private mortgage insurance (PMI) is designed to cover the lender in the case that the borrower defaults. A VA loan doesn’t require mortgage insurance.
VA funding fee
One minor downside to VA mortgages involves paying a VA funding fee of 0.5% to 3.6%. This fee is charged to mitigate the cost of the VA loan program on taxpayers and keep the program going for other borrowers. The cost can usually be rolled into the mortgage amount.
Closing costs
There is a limit to what VA lenders can charge you to cover their fees. The maximum a VA lender can charge is 1% of the loan. This feature means you’ll save money at closing, making VA closing costs more affordable than most government-backed loan programs.
No federal loan limits
Currently, there are no VA loan limits. However, some lenders may set a maximum on their own. These lender limits are typically similar to conforming loan limits for conventional loans. In 2022, the conforming loan limit was set as $647,200 (single-family homes) in most country areas.
Can you use VA loans multiple times?
Yes—with a few conditions.
Active-duty service members, qualifying veterans, and eligible surviving spouses can use their VA loan benefits multiple times throughout their lifetime.
If you can qualify with a lender and are still eligible, you can take out a VA loan as often as you like.
The critical part of understanding for subsequent VA loan applications is entitlement.
If you meet the program’s service requirements and are a veteran or active service member, then you have something called VA loan entitlement.
VA loan entitlement
Through their loan program, the VA guarantees to repay the lender if the eligible borrower defaults on the loan (foreclosure).
VA will typically guarantee a quarter of the principal amount of the loan, which in turn uses a quarter of the eligible borrower’s available entitlement.
Eligible borrowers (veterans and active members) can restore their full entitlement if the original loan is repaid in full.
Is it hard to get a VA loan?
On average, an eligible veteran can get approved for a VA loan and close in six weeks, about the same as a conventional mortgage.
Some factors can help you speed the process and get the keys to your home with fewer bumps in the road, the biggest one being pre-approval.
Pre-approval
Pre-approval for your VA mortgage, just like a traditional mortgage, can save time and improve your chances of buying a home with multiple bidders.
In addition, pre-approval makes your offer stand out to sellers and gives you a better idea of what you can afford in the real estate market.
Pre-approval shows the seller that you have a professional lender who is willing to back up your home offer. If your offer is accepted, several steps toward loan approval have already been taken during the pre-approval process, which saves loan processing time.
Secure your VA loan with GO Mortgage
A complaint that many homebuyers have when purchasing a home is that the process can be too complicated. When you add on the requirements of a VA loan, it can appear even more convoluted.
But it doesn’t have to be that way.
GO Mortgage deals with all different kinds of mortgages. From straightforward conventional mortgages and refinancing to less common mortgages like VA single-close construction loans—GO Mortgage can get the job done.
A no-downpayment and government-backed VA loan can be one of the best ways to find you and your family a new home.
Whether this is your first VA mortgage or you are looking to use your VA benefits even further, GO Mortgage can help you out.
Reach out to one of our GO Mortgage loan officers today.