Understanding your entitlement is important when it comes to buying a home with a VA loan. If you’ve never used your Veteran home loan benefits, you most likely still have full entitlement. But if part of your benefits are tied up in a previous purchase, you may have only some or none of that entitlement remaining. Below, we’ve discussed the steps you’ll need to take to have your entitlement restored.
Full Vs. Partial Entitlement for VA Loans
Before we go any further, let’s take a moment to talk a little bit more about full vs. partial entitlement for Veteran home loans. Full entitlement for a VA loan means a Veteran can borrow without a loan limit and no down payment, assuming they qualify. This happens when a Veteran has never used their VA loan benefit or has repaid a previous VA loan in full.
Partial entitlement occurs if a Veteran has used some of their loan benefits already and it hasn’t been restored. This can limit how much more they can borrow and might mean that they have to make a down payment.
Options for Restoring Your VA Entitlement
To restore your full VA entitlement, you have a few options, depending on your situation:
- Pay off your existing VA loan: After paying off your VA loan, you can request to have your full entitlement restored. This often happens when you sell the home and use the proceeds to pay off the loan.
- Refinance your VA loan into a non-VA loan: If you refinance your VA loan into a non-VA loan, you can also ask for your entitlement to be restored.
- Use a one-time restoration: If you have paid off your initial VA loan but still own the property, you can apply for a one-time restoration of your full entitlement. This allows you to keep the first property and still get another VA loan. However, after this one-time restoration, you would need to sell the property to restore entitlement again.
To restore your entitlement, you’ll need to fill out VA Form 26-1880, the Request for a Certificate of Eligibility, and provide proof that the VA loan has been fully paid off. For assistance, consider contacting an experienced VA mortgage lender like Mortgage Solutions Financial who can help guide you through the process.
Speak to a Veteran Home Loan Expert
Entitlement is a complicated topic that often causes confusion among VA borrowers. If you have questions about your Veteran home loan entitlement or would like some help with the application process, please do not hesitate to contact us. One of our VA mortgage experts will be more than happy to assist you!
