Understanding VA Loan Entitlement: How Much Do You Have Left?

The VA home loan program offers significant benefits to eligible veterans, including no down payment, competitive interest rates, and no private mortgage insurance (PMI). However, many veterans are unaware of how much of their VA loan entitlement remains, especially if they’ve used it previously. Understanding your remaining entitlement is crucial for maximizing your homebuying potential.

What Is VA Loan Entitlement?

VA loan entitlement refers to the amount the Department of Veterans Affairs (VA) guarantees to a lender in case of default. This guarantee allows lenders to offer favorable terms to veterans. There are two types of entitlement:

• Basic Entitlement: The standard amount available to all eligible veterans.
• Bonus (or Second-Tier) Entitlement: Additional entitlement available for loans exceeding $144,000, calculated based on the county loan limit.

How to Determine Your Remaining VA Loan Entitlement

To calculate your remaining entitlement, follow these steps:

1. Obtain Your Certificate of Eligibility (COE): This document provides details about your entitlement usage. You can request a COE through the VA’s online portal or by submitting VA Form 26-1880.
2. Identify the Amount of Entitlement Already Used: Your COE will list the amount of entitlement charged to previous loans.
3. Determine the County Loan Limit: Loan limits vary by county and are set by the Federal Housing Finance Agency (FHFA). You can find the current loan limits on the FHFA website.
4. Calculate the Remaining Entitlement:
• For loans above $144,000: Multiply the county loan limit by 25% to determine the maximum VA guaranty.
• Subtract the amount of entitlement already used from the maximum guaranty to find your remaining entitlement.()
• Example: If the county loan limit is $600,000, the maximum VA guaranty is $150,000 ($600,000 x 0.25). If you’ve previously used $50,000 in entitlement, your remaining entitlement is $100,000 ($150,000 - $50,000).
5. Consider the Need for a Down Payment: If your remaining entitlement is insufficient for the desired loan amount, you may need to make a down payment to cover the difference.

Tools to Help You Calculate Remaining Entitlement

The VA provides a Guaranty Percentage Calculator to assist in determining your remaining entitlement. While this tool offers an estimate, it’s advisable to consult with a VA-approved lender for precise calculations.

Additional Considerations

• Restoration of Entitlement: If you’ve sold a home and repaid the VA loan in full, you may be eligible to restore your full entitlement. This process involves submitting a request to the VA.
• Multiple VA Loans: You can have more than one VA loan simultaneously, provided you have sufficient remaining entitlement.

Understanding your VA loan entitlement is essential for making informed decisions about homeownership. If you need assistance calculating your remaining entitlement or navigating the VA loan process, consider consulting with a VA-approved lender or contacting the VA directly.

Our team specializes in VA loans, if you have any questions contact us and we can help.