If you’ve used your VA loan benefits before, you might wonder if you can restore your entitlement to purchase another home. Good news — you can! Restoring your VA loan entitlement isn’t as complex as it sounds.
It’s a valuable process for veterans who have paid off a previous VA loan, sold the property, or want to regain full access to their benefits for another purchase.
This guide covers everything you need to know about restoring your VA loan entitlement, the steps involved, and common scenarios that might affect your eligibility.
What is VA Loan Entitlement?
VA loan entitlement is the amount of the loan the VA guarantees for a lender, which enables veterans to purchase or refinance a home with favorable terms. Entitlement is expressed in two parts:
Basic Entitlement: Usually $36,000, which supports home loans up to $144,000.
Bonus Entitlement: Also known as Tier 2 or second-tier entitlement, this is used for loans exceeding $144,000.
If you’ve used your VA loan benefits to buy a home in the past, your entitlement may be reduced or completely used up. Restoring your entitlement allows you to access these benefits again.
San Antonio Housing Market Overview
In 2024, the San Antonio housing market has shown resilience despite national trends of fluctuating interest rates and varying home prices. The median home price in San Antonio is approximately $320,000, making it more affordable than other major Texas cities like Austin and Dallas.
For veterans using VA loans, the ability to finance a home with zero down payment provides a significant advantage in San Antonio's competitive yet accessible market. With VA loans accounting for nearly 15% of all home purchases in the area, the demand for these loans remains strong as veterans continue to leverage their benefits to enter the housing market.
Experts predict that San Antonio’s housing market will continue to attract veterans, as the area offers a lower cost of living and access to military resources compared to neighboring cities.
Scenarios Requiring VA Loan Entitlement Restoration
Here are the most common scenarios where you may need to restore your VA loan entitlement:
1. Selling Your Home
If you’ve sold a property purchased with a VA loan and the loan has been paid in full, you can apply for a full restoration of your entitlement. This allows you to use your benefits for your next home purchase.
2. Refinancing with a Non-VA Loan
If you refinance a home bought with a VA loan using a conventional or FHA loan, you can restore your entitlement, as the VA loan has been paid off and replaced with another type of financing.
3. Paying Off Your Loan in Full
If you’ve paid off your VA loan but haven’t sold the property, you may be eligible for a one-time restoration of your entitlement, even though you still own the home.
4. Using a Partial Entitlement
You may still have some remaining entitlement if your previous loan didn’t use up the full amount. In this case, you can use the remaining entitlement for another purchase or apply for a restoration to regain your full benefits.
How to Restore Your VA Loan Entitlement
“Many veterans don’t realize they can regain their full entitlement even if they’ve used it before. It opens up the possibility of buying another home with the same benefits,” explains Susan Miller, Lead Mortgage Advisor at Veteran Home Funding.
Follow these steps to restore your VA loan entitlement:
Sell Your Property or Pay Off the VA Loan
Make sure your existing VA loan is paid off entirely or that the property has been sold.
Submit VA Form 26-1880
Complete and submit VA Form 26-1880, Request for a Certificate of Eligibility (COE). This can be done online through the VA’s eBenefits portal or by mailing the form to the VA Regional Loan Center.
Submit Evidence of Payoff or Property Sale
Include proof that your previous VA loan has been paid off or that the property was sold, such as a HUD-1 Settlement Statement or a final loan payoff document.
Await Confirmation of Entitlement Restoration
The VA will review your request and notify you when your entitlement is restored. This process can take a few weeks, so plan accordingly if you’re looking to buy another home soon.
Receive a New Certificate of Eligibility (COE)
Once your entitlement is restored, the VA will issue a new COE, which you’ll need to present to your lender when applying for your next VA loan.
Benefits of Restoring Your VA Loan Entitlement
“Restoring your VA loan entitlement is crucial if you want to continue benefiting from no down payment options and lower interest rates, especially in today’s housing market,” says Mark Wilson, Senior Mortgage Specialist at Patriot Lending Solutions.
Restoring your entitlement has several advantages for veterans and active-duty service members:
Access to Full Loan Benefits: Allows you to use the full VA loan limits again, potentially up to $766,500 for Texas in 2024, without requiring a down payment.
Flexibility for Future Purchases: Restoration enables you to purchase another home using a VA loan even if you’ve used it before.
Competitive Interest Rates: Continue to access the lower interest rates typically associated with VA loans.
No PMI Requirement: VA loans do not require private mortgage insurance, which saves you money on your monthly mortgage payments.
Key Considerations
Restoring your VA loan entitlement is a powerful tool, but there are a few things to keep in mind:
One-Time Restoration: If you still own a property purchased with a VA loan, you’re eligible for a one-time restoration only. You must sell the property to use the entitlement again after this.
Partial Entitlement: If you have a partial entitlement remaining, it may limit your borrowing capacity on your next VA loan. Check with your lender to understand how much entitlement you have left
“Whether you’re selling your home or just paying off your VA loan, getting your entitlement restored is a relatively straightforward process that can save you a lot of money down the road,” notes John Davis, Loan Consultant at Valor Mortgage Services.
FAQs About Restoring VA Loan Entitlement
1. Can I restore my VA loan entitlement if I still own the property?
Yes, you can apply for a one-time restoration if you’ve paid off your VA loan but still own the property. For any subsequent restorations, you’ll need to sell the property.
2. How long does it take to restore my VA loan entitlement?
The process can take several weeks, depending on how quickly the VA processes your paperwork. Submitting your application through the eBenefits portal may expedite the process.
3. Can I use a restored entitlement to buy an investment property?
No, VA loans are only for primary residences. You cannot use VA loan benefits to purchase investment properties, even with a restored entitlement.
4. Do I need to pay any fees to restore my VA loan entitlement?
There is no fee for restoring your VA loan entitlement, but you will need to submit documentation showing that your previous VA loan has been paid off or that the property was sold.
5. Can I use a restored entitlement more than once?
Yes, you can use a restored entitlement multiple times as long as you meet the VA’s requirements, such as selling the property or paying off the existing VA loan.
6. What if I have a partial entitlement left?
If you have a partial entitlement, you can still use it, but your borrowing capacity may be limited. Consider restoring your full entitlement before purchasing your next home.
7. How do I know how much entitlement I have left?
You can check your remaining entitlement by reviewing your Certificate of Eligibility (COE) or contacting a VA-approved lender.
