secondary va home loans

Second Mortgage, VA Loans

Understanding Secondary VA Home Loans: A Complete Guide

Significant life changes like marriage, having kids, switching jobs, or dealing with health issues can greatly affect what kind of home you need. You might find yourself needing to move to a different place or get a bigger house to accommodate these changes. Military members and veterans face these situations too. If you’ve already used a VA loan but need to buy another home, a secondary VA home loan could be right for you. This comprehensive guide will teach you all you need to know.


What Are Secondary VA Home Loans?

Secondary VA loans are special loans that allow veterans or active military members to buy another home using their VA benefits again, even if they’ve already used them before. This means if you want to buy a new house after you’ve already bought one with a VA loan, you can still enjoy VA loan benefits like no down payment and not having to pay for private mortgage insurance. It’s a way to get help buying a home more than once, as long as you follow the rules and qualifications set by the VA.


Secondary VA Loan Eligibility

Eligibility for a secondary, or subsequent, VA home loan is based on a few key criteria related to your service, loan entitlement, and the status of any previous VA loans you’ve taken out. Here’s a simplified breakdown:


Service Requirements

To be eligible for any VA loan, including a secondary one, you need to meet the service requirements set by the VA. This usually means you’ve served a certain amount of time in the military, National Guard, or Reserves, or you are the spouse of a service member who died in the line of duty or because of a service-related disability.


Loan Entitlement

If you’ve fully paid off your previous VA loan and sold the property, you can have your full entitlement restored to use for another VA loan. Even if you haven’t sold the property bought with your first VA loan, you might still have some entitlement left. This remaining entitlement could be used towards another home purchase, though it may limit the loan amount.


Status of Previous VA Loan

If your previous VA loan is paid off but you still own the home (maybe it’s now a rental or a second home), you can apply to have your entitlement restored for a new purchase. If you have an active VA loan, you can still potentially get another VA loan if you have remaining entitlement and the ability to manage another mortgage.


Subsequent Use Fee

For secondary VA loans, there may be a higher funding fee compared to your first use. This fee can vary based on your down payment and whether you’re using the loan for the first time or subsequent times. Certain individuals, like those receiving VA compensation for service-connected disabilities, may be exempt from this fee.


Learn More About Secondary VA Home Loans

Do you have questions about your VA home loan eligibility? Give us a call! We will be more than happy to provide you with additional information or get started with the application process.