Recently I was asked a hypothetical question from another real estate professional. The gist of it was “Can you have more than one VA loan at the same time?”
Of course, I immediately felt the need find an answer to this very uncommon scenario. It is not an everyday occurrence, but there are some rare occasions where veterans may have more than one VA loan at the same time.
The most common reason for this involves a VA homeowner who relocates to a new station but wants to keep his current home. However, veterans using VA can also do this too.
How you are able to do this is by using your remaining VA entitlement. The conforming loan limit for conventional financing is $424,100. In most cases, the VA pledges to repay a quarter of the loan. A quarter of $424,100 is $106,025.
Now, assuming that you are buying in an area with the conforming loan limit of $424,100 (it can vary,) then your Maximum Guaranty is $106,025. Now, let’s say that you previously purchased a home for $200,000. The current entitlement that you have used is 25% of $200,000. Therefore, you have used up $50,000 of your current Maximum Guaranty of $106,025.
$424,100 x 25% = $106,025 Maximum Guaranty
$106,025 – $50,000 = $56,025 Entitlement Available
$56,025 x 4 = $224,100 Maximum Loan Amount With No Down Payment
This means that you have $56,025 in VA Entitlement available to help you purchase another home. If we multiply this number by 4 we are able to calculate the Maximum VA loan amount you will qualify for without downpayment. Any loan above the amount guaranteed by your entitlement would require a downpayment.