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I want to buy a new home with a VA loan. Is it possible to "renew" my entitlement to a veterans' home loan?
When the Veterans Administration guarantees your VA home loan, you are using the entitlement that is yours as a result of your service to your country. As long as this guarantee is in effect, you are ineligible to receive another loan that is backed by the VA. This brings up the obvious question, "What if I want to buy or build a new home?" Fortunately, there are provisions for this type of situation. Eligibility There are several ways that you can "renew" your entitlement. The easiest one is for you to pay off the mortgage on the first house. In other words, you obtain the required documentation from your lender that states that you have paid off the original note in full, and you are almost there. Almost, because the rules state that you have disposed of the property – you no longer live there. In this scenario, you can apply for reinstatement of your entitlement and you are ready to start the process again. But, what if you still own the property? Once again, there are provisions, but they have their limitations. First of all, as with the first option, you must have proof that the original loan is paid off. Once this is done, even if you still own the property, you can apply for a one-time exception to the rule. If approved, your entitlement will be reinstated, thus making you eligible for another Veterans home loan guaranty. If you sell your home on an assumption note, the entitlement cannot be renewed until the note is fully paid, unless the buyer is also a veteran. Why VA? A guaranteed loan with no down payment and no PMI fees – what's not to like? We have made it our business to understand the difference between a conventional loan and one with the backing of the Veterans Administration. With our help, you will find the answers to all your questions – whether it is your first loan or your second. |
