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How to Use a California VA Loan More Than Once
Home buyers tend to have a lot of questions about the VA loan program, and we’ve addressed quite a few of them in the past. Today, we will answer another common question about this program: Can I use a California VA loan more than once?
The short answer is yes, people who have used this program in the past are able to use it again in the future. In fact, there’s no limit to how many times you can use a VA loan in California (or elsewhere), as long as you have entitlement remaining. And we’ll cover all of that below.
Note: This article mentions California a lot, because that’s the state we serve. But the general rules, requirements and procedures for this program are the same for all states.
Using A VA Loan More Than Once in California
The VA home loan program is a lifetime benefit for military members and veterans. That means they can use the program more than once, as long as they meet all relevant program requirements. Repeat usage is allowed.
As it states on the Department of Veterans Affairs website: “Your VA home loan benefit is not one-and-done. You can use it as many times as you want.”
This benefit is especially important for people who are still serving in the military, since they tend to move around every few years. It allows borrowers to finance a home purchase at one duty station, sell the house when transferring, and then reuse the benefit to buy a home at the next duty station. You can’t beat those benefits!
But if you’re going to use a second (or third or fourth) VA loan in California, you have to consider your entitlement status. In this context, “entitlement” refers to the amount of benefits you’re eligible to receive under the VA’s home loan program.
Here’s the basic difference between full and remaining entitlement:
- If you’ve never used the program before, or if you’ve used it but paid off the loan through the sale of your home, you should have full entitlement remaining.
- If you have a VA loan that you’re still paying off, or you’ve paid it off but still own the home, you probably have partial or “remaining” entitlement.
Selling a home is the most common scenario where a person wants to use a VA loan more than once. In this scenario, a home buyer uses the program to purchase a house in California or elsewhere in the country. Later, they sell that house and use the proceeds to pay off their mortgage balance in its entirety.
This action will restore the military member or veteran to full entitlement. That means they can use another VA loan to buy a house in California. That’s one of the many benefits associated with this program.
Turning a Home Into A Rental or Income Property
As explained above, eligible borrowers can fully restore their VA loan entitlement by selling the home and paying off the loan balance in full. It’s like making a fresh start.
But there’s another scenario where a borrower might want to use a VA loan more than once. For instance, a homeowner who has paid off the original mortgage used to buy the house might want to keep the property as a vacation or rental home — and then buy another home. In that case, the homeowner might be able to use a one-time restoration benefit.
As it explains on the VA website:
Eligible Veterans and Servicepersons can receive a one-time restoration when they pay off the VA loan, but keep the home … you can keep the home, and enjoy the benefits of VA home buying one more time.
The point is, this program offers lifetime benefits for California military members and veterans. A VA loan can be used more than once. Technically speaking, there is no limit to how many times you can use it as long as you restore your entitlement.
No More Loan Limits for Most Borrowers
In the past, VA loans had certain size limits associated with them. If you exceeded the limit, you had to put money down on your purchase (instead of enjoying the zero-down benefit).
But all of that changed in 2020, with the passage of the Blue Water Navy Vietnam Veterans Act. Among other things, this piece of legislation eliminated the VA loan limits for some borrowers who use the program.
Here’s the short version. If you have full entitlement (as explained above), there is no longer an official VA loan limit that affects you. However, if you have partial entitlement remaining, you must stay within those size limits to avoid making a down payment.
As the Department of Veterans Affairs explains it:
“VA-guaranteed home loans will no longer be limited to the Federal Housing Finance Agency (Federally-established) Confirming Loan Limits. Veterans will now be able to obtain a no-down payment home loan in all areas, regardless of loan amount.”
Let’s Talk about Your Financing Options
The VA loan program can be a bit complicated, especially when it comes to entitlement-related benefits and repeat use. That’s where we come in!
Bridgepoint Funding specializes in VA loans for California home buyers. We are passionate about this program because it rewards our brave military service members and veterans.
We are very familiar with this program and can answer any questions you have about using a VA loan to buy a home in California. Please contact our knowledgeable staff if you have questions, or if you would like help figuring out your entitlement situation.