You Can Have More than One VA Loan

 In Qualifying for a Mortgage

If you are a veteran or in the active military, Reserves, or National Guard, you may qualify for a VA loan.  VA loans are the best option for anyone who qualifies for one. There is no down payment requirement, there is no mortgage insurance, and the rates are lower than they are for other types of loans.

Did you know that you can have more than one VA loan at a time?  Here’s what you need to know.

I Already Have a VA Loan

If you already have a VA loan and you want to buy a new house and keep the one you currently have, that’s fine with VA.  However, there is a limit to how big a loan you can get with a second VA loan.  

In the Denver Metro area, the maximum amount for a second VA loan is calculated like this:

Start with the conforming loan county limit.  Every year, Fannie Mae and Freddie Mac (the companies that buy mortgages from lenders to keep the supply of mortgage money flowing) establish a limit for the largest loan they will buy from a lender.  Anything over that limit is considered a jumbo loan and has different underwriting guidelines (higher down payments, higher credit scores, etc.). For 2020, the maximum conforming loan limit is $575,000 for Adams, Arapahoe, Broomfield, Denver, Douglas, and Jefferson Counties.  This is known as your VA entitlement.

From that loan limit, subtract the amount of the existing VA loan that you have.

Getting More than One VA Loan

If the difference is greater than or equal to the purchase price of the house you want to buy, you can get a second VA loan with no money down.

If the difference is less than the purchase price of the house you want to buy, you will have to put some money down, but you can still get a VA loan.  The required down payment is 25% of the difference between the purchase price and your remaining VA entitlement.

Examples

Here are some examples:

For both examples, let’s assume the first VA loan you got was for $250,000.  To calculate your remaining VA entitlement, subtract 250,000 from the conforming loan limit of 575,000.  The difference between these two numbers is 325,000.  

Example 1: If the new house you want to buy is less than $325,000, you are not required to have a down payment.  You can get your second VA loan for 100% of the purchase price.

Example 2: If the new house costs more than $325,000, you will need to have a down payment equal to 25% of the difference between the purchase price and $325,000.  If the new house costs $400,000, you will need $18,750 as a down payment. 400,000 – 325,000 = 75,000. 25% of 75,000 is 18,750.

I Don’t Have a VA Loan

It is important to note that these calculations are only needed when you have one VA loan and want to get a second one without paying off the first loan.  If you do not already have a VA loan, there is no down payment requirement, regardless of the purchase price of the house you want to buy.

Although this may seem complicated, that’s where we come in.  We are VA loan experts and we can figure everything out for you.  Contact us today to see how easy it is to get a VA loan, or a second VA loan if you already have one.

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