The VA home loan is one of the most popular types of mortgage available to eligible members of the armed forces and veterans, who wish to buy a house without making a down payment. These loans are provided by government and are flexible in terms and conditions. The one question that is frequently asked is “How many times can I use the VA home loan benefit?” Here it is in detail.
It is essential to note that VA loans are usable not just once but multiple times. I have not found any regulation that limits the use of the VA home loan entitlement to a single time only. However, this may not be possible for a veteran to do if they intend to make use of this resource more than once in their homeownership career.
The Number of VA Loans Allowed
The Veterans Administration does not restrict the frequency with which a borrower can take a VA loan. Nevertheless, most lenders will not allow veteran borrowers to take more than one VA-backed loan at a time.
Thus, for instance, if a VA home loan holder is continuing to make payments on the currently owned VA mortgage, he or she will not be eligible for another simultaneous VA loan on a new home. You either have to bring down the current VA loan balance to zero before acquiring a new VA purchase loan, or convert the current loan to a conventional loan.
The primary limitation can be summed up in the guidelines governing the use of the home that backs the VA mortgage. These loans must include the borrower or their spouse occupying the home in question. The VA program does include loans on rental properties and vacation homes.
Therefore, borrowers can re-establish the VA home loan entitlement for use provided that the previous home has been sold or the prior loan has been paid in full.
VA Loan Use for Multiple Home Purchases
The VA financing can be utilized more than once by any eligible borrower in his or her lifetime if necessary. For instance, a soldier may use the VA loan to buy his or her first home. Later when they receive orders for a permanent change of station, they can then use another VA loan to purchase a home in the new station.
If the borrower was to keep the first home and live in it while the second home is rented out, they would be required to refinance to a conventional mortgage before using VA entitlement. This enables them to comply with the owner occupancy requirements that come with VA loans.
On the other hand, if a VA borrower used a VA loan to finance the purchase of a property, then he or she could refinance a VA interest rate reduction loan when the rates are again low. Since these are actually rate-and-term refinances, not new purchases, borrowers can do multiple IRRLs during their time.
Can You Use VA Loan After Defaulting?
Failing to pay the previous VA mortgage is not enough to bar someone from accessing the program once more. To be eligible for a new VA-guarded loan after a previous default, the borrower must:To be eligible for a new VA-guarded loan after a previous default, the borrower must:
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The current method should be to pay off the defaulted mortgage balance and bring the account current.
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Satisfies all other VA mortgage requirements such as income, credit history etc.
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It is crucial to give a reasonable explanation for the causes of an earlier default if one intends to re-apply for a similar position
- Provide proof that all the issues which caused the previous default have been sorted
A homeowner is allowed to be granted another VA home loan notwithstanding a default. However, be prepared for much tighter examination from the lending institutions. Any mishaps that you made in previous VA loans becomes your disadvantage.
One defaulted VA loan means the chances of approval are even slimmer. A history of more than one of default or foreclosure greatly hinders the possibility of obtaining another VA mortgage in most situations and environments.
Special Provisions for some Military Personnel
However, for the active duty military persons there are sometimes exceptions to the one VA loan at a time rule. For instance, active duty military with PCS orders might be able to secure a second VA purchase loan before finalizing the first one.
This special allowance enables them to acquire a new principal residence wherever they are moving to without having to sell their existing home first. However, there are some conditions for receiving such a gift – the distance to the place they are going to move should be at least 50 miles more than the distance to the current home. There are also maximum loan amount restrictions corresponding to the FHFA conforming loan limits.
Further, those who meet the criteria of obtaining VA loans and experience such incidents as a sudden deployment or an injury, there are other options for them if they are faced with the sale. They include things like mortgage payment forbearance, loan refinancing or partial claim payment in situations of hardship.
VA loans do have their benefits, however, a veteran needs to consider the following if intending to use the entitlement more than once. What is important to grasp is the set of common-sense rules governing ownership and occupancy. Consult requirements with qualified lenders and review them.
