Can You Have Two VA Loans at the Same Time?
Updated: Oct 25
If you already have a VA loan and you're getting ready to move, you may be wondering: Do I have to sell my current house before I can use my VA loan again? Not necessarily. It is possible to have more than one VA loan at the same time. This comes up often for military families, especially during a PCS.
Maybe you bought a home at your current duty station with a VA loan and you'd rather keep it as a rental. Or maybe you're moving before you've had time to sell. Either way, having an existing VA loan does not automatically mean you can't use your VA benefit again. The question becomes: How much VA entitlement do you have left?
What Is VA Entitlement?
VA entitlement is essentially the amount the Department of Veterans Affairs will guarantee on your VA loan. When you use a VA loan, some of your entitlement is tied to that loan. If you haven't sold the property and restored that entitlement, you may still have remaining entitlement available to use toward another VA loan. You can use your VA home loan benefit more than once. The bigger question is how much entitlement is currently available to you and what you're trying to purchase next.
How Do I Know How Much Entitlement I Have Left?
The first thing I want to look at is your Certificate of Eligibility, or COE. Your COE can show the entitlement that has already been charged to previous VA loans. From there, we can look at the entitlement currently in use, the applicable loan limit for the new property, and the price of the home you're considering to determine what the next purchase could look like.
This is one of those things I'd much rather calculate for you based on your actual COE and purchase scenario than have you rely on a generic online calculator.
Does Having Two VA Loans Mean I Need a Down Payment?
Maybe. Maybe not. Having an existing VA loan does not automatically mean you'll need a down payment on the next one. It depends on how much entitlement you have remaining and how much you're borrowing on the new property.
In some situations, a no-down-payment purchase may still be possible. In others, you may be able to use VA financing but need a down payment based on the entitlement available. This is why two veterans who both currently have VA loans could get completely different answers. Their existing entitlement usage, new purchase price and property location may all be different.
What If I'm Keeping My Current House as a Rental?
This is where VA financing can be especially helpful for military families who are PCSing. If you're moving out of your current home and plan to rent it, VA guidelines can allow us to use prospective rental income from the departing residence when qualifying you for the new home. And here's the part a lot of people don't realize: you don't necessarily have to already have a tenant in the house for us to consider the rental income.
Depending on the circumstances and required documentation, we may be able to use market rent established for the departing residence when calculating qualification for the new VA loan. That can potentially help offset the mortgage payment on the home you're leaving. That's a big deal for someone who gets orders and doesn't want to sell their current house just to qualify for the next one. There are still qualification and documentation requirements, and we have to look at the complete file. But I don't want a military family assuming, "I can't qualify for another house because I'm still responsible for this mortgage." That may not be the case.
If you're considering keeping your current home, I want to look at three things: how much VA entitlement is still available for the next purchase, what the market rent looks like for the home you're leaving and how it can be treated under VA guidelines, and what your complete qualification looks like for the new home. That gives us a much more accurate picture of whether keeping the house, renting it out and using your VA benefit again could work.
What If I'm PCSing to Little Rock Air Force Base?
This is exactly the type of situation where remaining entitlement and departing-residence rental income can become important. If you're PCSing to Little Rock AFB and currently own a VA-financed home somewhere else, you don't necessarily have to sell that home before we start looking at your options in Arkansas. We can pull your COE, determine how much entitlement is currently tied up, look at the home you're leaving and its market rent, and then run the numbers for the price range you're considering around Cabot, Jacksonville or the surrounding Central Arkansas area.
You can do this before you arrive in Arkansas. In fact, I'd rather have this conversation early. If keeping your current home affects your entitlement, qualification or the price range that makes sense, that's something you should know before you're looking at houses.
Can I Restore My VA Entitlement?
In many situations, yes. One common way is selling the property that was purchased with the previous VA loan and paying that loan in full. There are also circumstances where entitlement may be restored even when you keep a property after the prior VA loan has been paid in full. Restoration has its own rules, so this is another area where I want to look at your specific situation rather than give you a blanket answer.
You Don't Have to Choose Between Selling and Buying Before You Know the Numbers
If you're moving and already have a VA loan, don't assume you have to sell your current home before you can even consider buying another one. And don't assume the opposite either. Let's actually run the numbers.
I can look at your COE, remaining entitlement, current mortgage, potential departing-residence rental income, new price range and overall qualification and show you what your options look like. Then you can decide whether keeping, renting or selling your current home makes the most sense for your family. Know Moore. Worry Less.
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