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VA Loan Information
HAD A VA LOAN BEFORE?
Remaining Entitlement
Veterans who had a VA loan before may still have "remaining entitlement" to use
for another VA loan. The current amount of entitlement available to each eligible
veteran is $360,000. This was much lower in years past and has been increased over
time by changes in the law. For example, a veteran who obtained a $25,000 loan in
1974 would have used $12,500 guaranty entitlement, the maximum then available.
Even if that loan is not paid off, the veteran could use the $47,500 difference
between the $12,500 entitlement originally used and the current maximum of $104,250
to buy another home with VA financing. An additional $47,500, up to a maximum
entitlement of $104,250 is available for loans above $144,000 to purchase or
construct a home.
Most lenders require that a combination of the guaranty entitlement and any cash
downpayment must equal at least 25 percent of the reasonable value or sales price
of the property, whichever is less. Thus, in the example, the veteran's $47,500
remaining entitlement would probably meet a lender's minimum guaranty requirement
for a no downpayment loan to buy a property valued at and selling for $190,000.
The veteran could also combine a downpayment with the remaining entitlement for
a larger loan amount.
Restoration of Entitlement
Veterans can have previously-used entitlement "restored" to purchase another
home with a VA loan if:
- The property purchased with the prior VA loan has been sold and the loan paid in full, or
- A qualified veteran-transferee (buyer) agrees to assume the VA loan and substitute his or her entitlement for the same amount of entitlement originally used by the veteran seller. Remaining entitlement and restoration of entitlement can be requested through the nearest VA office by completing VA Form 26-1880.
- The entitlement may also be restored one time only if the veteran has repaid the prior VA loan in full but has not disposed of the property purchased with the prior VA loan.
FREQUENTLY ASKED QUESTION # 12 [ -more VA Loan questions- ]
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Q: Are You Eligible for a VA Home Loan Guaranty - How do I get proof of eligibility?
A: It's easy to use an online program called ACE--the Automated Certificate of Eligibility--to get started in the VA loan guaranty process, yet can only have this done by a VA approved lender. Unfortunately, the automated system won't work for everyone. Some people don't have enough information in the ACE database, and are required to fill out a VA Form 22-1880, a Request for Certificate of Eligibility. If this applies to you, simply fill out the form and mail it to your regional Eligibility Center along with supporting paperwork including a copy of the DD214 discharge paperwork. Don't send originals of the DD214, a photocopy will do. The certificate of eligibility process can be tricky for veterans who were separated from the military with a discharge other than honorable. In this case the VA must investigate the discharge to insure it was not classified as dishonorable. People who fall into this category should seek help from their local VA office, especially if you need to file an appeal to the results of your request of eligibility.
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