In this article, we delve into a topic that is of significant importance to many in our veteran community: the intricacies of multiple VA loans. These special loans offer unique benefits and opportunities for those who have bravely served our country, often providing more advantageous terms than standard mortgages.
A common question we encounter from veterans who are thinking about their future housing plans is whether it’s possible to manage two VA Loans at the same time. This query is particularly relevant for those looking to purchase a new home while maintaining ownership of their existing property. Let’s explore the realities and guidelines surrounding the handling of multiple VA loans.
Table of Contents:
- What are VA Loans?
- Can You Have Two VA Loans At The Same Time?
- What Factors Influence Whether I Can Have Two VA Loans?
- What Are The Eligibility Requirements for VA Loans?
- How Can I Get Two VA Loans At The Same Time?
- Should I Get Two VA Loans?
- Frequently Asked Questions
- How Can I Begin My Second VA Loan Journey Today?
What are VA Loans?
VA loans are a special mortgage option available to veterans, service members, and select military spouses. They are guaranteed by the Department of Veterans Affairs, which makes lenders more comfortable offering favorable terms, such as zero down payment, no private mortgage insurance (PMI), and competitive interest rates.
Can You Have Two VA Loans At The Same Time?
Yes, it is possible to have two VA loans at the same time. However, this scenario depends on several factors, including eligibility, entitlement, and financial capacity.
The VA loan program is designed to help veterans purchase or refinance a primary residence. Having two VA loans concurrently is often linked to specific situations like relocation due to Permanent Change of Station (PCS) orders, upgrading to a larger home due to family expansion, or other unique circumstances.
What Factors Influence Whether I Can Have Two VA Loans?
When considering the possibility of obtaining two VA loans simultaneously, several key factors come into play. Understanding these can help you determine if this option is feasible for your situation:
VA Loan Entitlement
One of the most critical factors is your VA loan entitlement. Every eligible veteran is granted a certain amount of entitlement, which partly guarantees the loan to the lender. If you have used a portion of your entitlement for your first VA loan, the remaining entitlement can be used towards a second loan. However, the remaining entitlement must be sufficient to cover the loan amount for the second property.
Secondary Loan Limits
The VA sets loan limits that vary by county. These limits determine the maximum amount a veteran can borrow without needing a down payment. If your second home’s cost exceeds these limits and your remaining entitlement, you might be required to make a down payment.
Financial Eligibility
Even if you have enough entitlement, lenders will also assess your financial eligibility. This includes reviewing your debt-to-income ratio, credit history, and current financial obligations. The lender needs to be confident in your ability to manage two mortgage payments concurrently.
Occupancy Requirements
VA loans require the borrower to occupy the home as their primary residence. Therefore, if you’re considering a second VA loan, you need to have a valid reason for not occupying your first home (such as a job relocation) and plans to make the new property your primary residence.
Usage of First VA Loan
If your first VA loan was used for a property you no longer occupy (due to reasons like military deployment or relocation), you might be eligible for a second VA loan for a new primary residence. The specifics of your situation will play a significant role in this determination.
Lender-Specific Criteria
Apart from the VA’s requirements, individual lenders may have their own criteria and conditions for approving a second VA loan. It’s important to discuss your situation with a lender who has experience in handling multiple VA loans to understand their specific requirements.
What Are The Egilibity Requirements for VA Loans?
VA loans are a valuable benefit for military service members, veterans, and certain military spouses, offering more favorable terms compared to conventional loans.
However, to take advantage of this benefit, individuals must meet specific eligibility requirements set by the Department of Veterans Affairs. Here’s a breakdown of these requirements:
Service Duration and Duty Status
Eligibility largely depends on your service duration and duty status. Generally, you must have:
- Served 90 consecutive days of active service during wartime.
- Served 181 days of active service during peacetime.
- Completed more than six years of service in the National Guard or Reserves.
If you are the spouse of a service member who died in the line of duty or as a result of a service-related disability, you may also be eligible.
Certificate of Eligibility (COE)
To prove your eligibility for a VA loan, you’ll need a COE. This document verifies to lenders that you meet the necessary service requirements. You can apply for a COE through the VA’s eBenefits portal, by mail, or your lender can often obtain it for you. At Rob’s Mortgage Loans, we first order an electronic COE… most times this comes back in a very short time.
Credit and Income Requirements
While the VA does not set a minimum credit score, lenders typically have their own credit requirements. Generally, a credit score of 620 or higher is favorable. Lenders will also assess your debt-to-income ratio and require stable, sufficient income to ensure you can cover the monthly mortgage payments and other living expenses.
Primary Residence Requirement
VA loans are designed for primary residences. You must intend to occupy the home as your primary residence within a reasonable period after closing. VA loans are not intended for vacation homes or investment properties.
VA Loan Limits and Entitlement
While there is no maximum amount for how much you can borrow with a VA loan, there is a limit to the VA’s guarantee, which varies by county. If you want to borrow more than this limit, you may need to make a down payment. Your VA loan entitlement, the amount the VA guarantees on your behalf, plays a crucial role in this aspect.
Suitable Property Condition
The property you wish to purchase must meet certain safety, sanitation, and structural integrity standards as set by the VA. A VA appraisal will be required to evaluate the property against these standards.
Remember, each situation is unique, and other conditions may apply based on individual circumstances. It’s always recommended to consult with a VA loan specialist who can provide detailed guidance based on your specific eligibility and needs.
How Can I Get Two VA Loans At The Same Time?
Securing two VA loans simultaneously is a process that demands meticulous planning and understanding of VA loan rules.
Obtaining two VA loans simultaneously involves careful coordination and a thorough understanding of VA loan regulations. Here’s a step-by-step guide to navigate this process:
1. Check Your Entitlement
Begin by reviewing your remaining VA loan entitlement, vital for a second loan. This information is detailed in your Certificate of Eligibility (COE).
2. Organize Your Financial Documentation
Compile the necessary financial documents. These include:
Your Certificate of Eligibility (COE) ** we will order electronically
Recent pay stubs as proof of income
W-2s and federal tax returns for income verification
A current credit report ** we order this.
Account statements covering all your financial assets
3. Choose Your Property Carefully
Select the property you intend to buy with the second VA loan, ensuring it meets the VA’s strict occupancy standards.
4. Initiate Pre-Approval with a Lender
Contact a knowledgeable VA loan specialist like those at Rob’s Mortgage Loans for pre-approval, an important step in understanding your borrowing power for a second VA loan.
5. Fill Out the VA Loan Application
With your lender’s assistance, complete the VA loan application, submitting all the gathered documents.
6. Property Appraisal by the VA
The VA will conduct an appraisal of the new property, a crucial step to determine its market value and ensure it aligns with loan requirements.
7. Attain Final Approval and Proceed to Closing
After a successful appraisal and meeting all criteria, you’ll receive the final loan approval. The next step is closing, where you finalize the ownership of your second property.
Our team at Rob’s Mortgage Loans is ready to assist you through every step of this process. We offer guidance in understanding your entitlement, preparing the necessary documents, and ensuring a smooth application process.
Should I Get Two VA Loans?
At Rob’s Mortgage Loans, we have seen numerous veterans successfully manage two VA loans. The key is understanding the unique aspects of VA loans and how they apply to owning multiple properties. We emphasize the importance of financial readiness and being aware of your long-term housing needs.
For instance, we worked with a veteran who was relocating due to a new job but wanted to keep their existing home. By carefully evaluating their entitlement and financial situation, we helped them secure a second VA loan for their new primary residence near their workplace.
- Always stay informed about your entitlement and remaining eligibility.
- Regularly review your financial situation.
- Consider future housing needs and how they align with your current situation.
Frequently Asked Questions
Can I use a VA loan to buy an investment property?
- No, VA loans are intended for primary residences only.
What is the VA funding fee for a second loan?
- The VA funding fee may vary based on your down payment and whether it’s your first or subsequent use of a VA loan. Check with your lender for exact figures.
How long do I need to live in a home purchased with a VA loan?
- The VA requires you to occupy the home as your primary residence. Typically, you must move in within 60 days of closing.
Can I rent out my home bought with a VA loan?
- While the primary intent is for you to occupy the home, you can rent it out under specific circumstances, such as a permanent change of station.
Can I refinance a VA loan?
- Yes, the VA offers options to refinance. Contact a lender to discuss the VA Streamline Refinance (IRRRL) and VA Cash-Out Refinance options.
How Can I Begin My Second VA Loan Journey Today?
Remember that having two VA loans at the same time is a feasible option for many veterans, though it requires careful planning and understanding of the rules and limitations. At Rob’s Mortgage Loans, we are committed to helping veterans like you navigate this process with ease.
For personalized advice and assistance, don’t hesitate to contact us. We encourage you to sign up for our newsletter or schedule a consultation to stay updated and informed about VA loans.
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About Robert Sturms
With over three decades of experience, Rob Sturms is a trusted name in Colorado’s mortgage industry. Since 1993, he has been guiding clients with honesty and expertise through various loan options, ensuring personalized solutions for each homeowner’s journey. As the founder of Rob’s Mortgage Loans, Rob’s commitment to transparency and tailored service makes him the go-to choice for reliable lending assistance.