Understanding Your VA Loan Entitlement
If you qualify for a loan from the Department of Veterans Affairs (VA), you have something called VA loan entitlement. This is the amount of money the government will pay your lender if you default on a home loan.
Understanding your entitlement is crucial, as it determines how much money you can borrow without having to make a down payment. Plus, in cases where you do need to make a down payment, your entitlement helps determine how much it will need to be.
What is VA entitlement?
VA entitlement is a promise to you, from the VA, that it’ll help you buy a home by “guaranteeing” your VA home loan.
This guarantee acts almost like mortgage insurance: If you can’t repay your mortgage, the VA reimburses the lender up to a certain amount. This allows VA loan lenders to give you better loan terms and, in most cases, waive the need for a down payment.
How much is VA entitlement?
If you’ve never taken out a VA loan, you have full basic entitlement, which is $36,000.
When you see your VA entitlement listed out as a dollar amount, that dollar amount is how much the VA will reimburse your lender if you fail to repay your mortgage. Don’t confuse that number with how much you can borrow — there’s no maximum loan amount for VA loan borrowers with full entitlement.
Having entitlement is only one requirement for a VA loan — your lender will still have VA loan requirements that you’ll need to meet.
What is remaining entitlement?
If you’ve used a VA loan in the past, you may have remaining (also known as partial) entitlement instead of full entitlement.
For example, if your first loan hasn’t been fully paid off or went into foreclosure, some of your VA entitlement may still be in use by those loans. (That said, you may still have some remaining entitlement. We’ll cover how to calculate your remaining entitlement below).
What is bonus entitlement?
Along with your normal (“basic”) entitlement, the VA offers a bonus entitlement that kicks in when you take out a loan over $144,000.
Your bonus entitlement is 25% of the conforming loan limit of the county you’re purchasing in.
→ As long as you have full entitlement, the bonus entitlement will fill the gap between what the basic entitlement can cover and what your loan amount requires.
→ If you have remaining or even no entitlement, you may still be able to access bonus entitlement as long as you’re borrowing more than $144,000.
Luckily, you aren’t responsible for asking your lender for your bonus entitlement separately if your loan amount requires it. The terminology of “basic” and “bonus” entitlement will likely come into play only when your lender and the VA speak to each other about your loan. From the borrower’s side, it’s not necessary to master these concepts.
Why do I need to know how much VA loan entitlement I have?
VA loan entitlement determines how much you can borrow without having to make a down payment.
If you have full entitlement:
- You have no VA loan limit. You can borrow as much as you like (and a lender is willing to approve you for) and still not have to put any money down.
If you have remaining entitlement:
- You have a VA loan limit, which caps how much you can borrow without making a down payment. You’ll need to calculate your zero-down loan limit, since it’s specific to you.
- You can borrow more than your VA loan limit, but in that case you’ll need to make a down payment. Determining how large of a down payment requires some additional calculations.
We’ll walk you through all of these calculations step-by-step below. But before you can do these calculations, you’ll first need to find out how much VA loan entitlement you have.
How much VA loan entitlement do I have?
The best way to check your VA entitlement is to request a VA certificate of eligibility (COE) online.
Your COE will list exactly how much basic entitlement you have. If you don’t currently have a VA loan, it’ll show the full basic VA entitlement of $36,000. However, if you own any other VA-financed properties, the COE will provide details about the loans, how much entitlement you’ve used and how much you have remaining.
- Multiply the loan amount of your first VA loan by 0.25. This will tell you how much of your entitlement you’ve already used.
- Subtract that amount from the $36,000 maximum basic entitlement.
- The resulting number is the amount of basic entitlement you have left. (If it’s a negative number, consider the remaining basic entitlement to be $0.)
What if my COE says I have $0 in basic entitlement?
If your COE says you have “$0” in basic entitlement left, it doesn’t necessarily mean you can’t get another VA loan. In that situation, you might still be able to buy a second home with VA financing.
In fact, even if your first home loan went into foreclosure, you could be eligible for bonus entitlement as long as the loan amount is high enough (over $144,000).
If you’re unsure about your entitlement, the best thing to do is reach out to your loan officer or speak to a VA home loan representative. Just call 877-827-3702 between 8:00 a.m. and 6:00 p.m. EST.
Important VA loan entitlement calculations step-by-step
How to calculate your total remaining entitlement
Why would I want to calculate this?
Your COE will tell you how much basic entitlement you have remaining, but that’s not the whole story. If you want to use your VA loan benefit again, you’ll need to know how much total remaining entitlement you have, as it affects:
- How much you can borrow (and still put zero down)
- How much you’ll need to put down on a second (or subsequent) VA loan
To understand how much total entitlement you have left, you need to account for both your remaining basic entitlement and remaining bonus entitlement.
Here are the steps you’ll need to take to calculate your total remaining entitlement:
- Find the conforming loan limit in the county you’re planning to buy your next house in and multiply it by 0.25. Your remaining bonus entitlement is 25% of the conforming loan limit of the county in which you are buying your new house. This is your maximum total guaranty. If you can’t repay your mortgage, the VA reimburses the lender up to a certain amount. That amount is known as a “guaranty.”
- Multiply the loan amount of your first VA loan by 0.25 to get the amount of basic entitlement you’ve already used.
- Subtract the amount of basic entitlement you’ve already used from your maximum total guaranty.
- The resulting number is your total remaining entitlement.
How much can I borrow and still put zero down on a VA loan?
Remember: If you have full entitlement, there’s no need to calculate this because you have no loan limit.
For those with remaining entitlement, the maximum amount you can borrow — and still put zero down — is four times your total remaining entitlement.
If you aren’t sure what your total remaining entitlement is, that’s okay. The steps below show how to calculate your zero-down loan limit, and don’t require you to already know your total remaining entitlement
Steps to calculate your zero-down loan limit:
- Find the conforming loan limit in the county where you are planning to buy your second house and multiply it by 0.25. This is your maximum total guaranty.
- Look up the conforming loan limit for the county your first home’s located in and multiply it by 0.25. This is how much of your entitlement you’ve already used.
- Subtract the amount of entitlement you’ve already used from your maximum total guaranty. The resulting number is your total remaining entitlement.
- Multiply that number by 4 to arrive at the maximum loan amount you can take out without having to make a down payment.
You’ve been assigned to a new permanent change of station and have your eye on a home priced at $250,000 there. The conforming loan limit in your new home’s county is $766,550, which makes your maximum total guaranty $191,638.You previously used your VA loan benefit to buy a house for $300,000, which required $75,000 in basic entitlement. Subtracting $75,000 of previously used entitlement from that $191,638 leaves you with $116,638 in remaining entitlement. Multiply that by 4 and you’ll see that you can borrow up to $466,552 without having to make a down payment.
How much of a down payment do I need for a second home loan?
If you have remaining entitlement, you may have to put some money down on a second home, especially if you’re buying in a high-cost area. The reason is that, if your remaining entitlement won’t cover the full amount of guaranty you’d need for your second loan, you’ll have to come up with the difference in the form of a down payment.
Here are the steps to calculate how much your down payment will be:
- Divide the price of your second VA home loan by 4. This is the base guaranty amount.
- Subtract the entitlement amount you used on your first home purchase from the base guaranty amount. This is the amount you have left to use on your second home loan.
- Subtract that number from the base guaranty amount. This is how much of a down payment you’ll need to make.
How and when to restore your VA entitlement
In some cases, you can restore your VA entitlement. You’ll need to fill out VA Form 26-1880 to restore your eligibility in the following three scenarios:
- You paid off the VA loan on another home you still own. VA entitlement is tied to both the loan and the property. For example, if you still own and rent out a home with a paid-off VA home loan, you’ll need to request a one-time restoration to reestablish your full entitlement.
- You sold your home, but your eligibility has yet to be restored. If your certificate of eligibility shows “PIF No Restoration,” that means your previous VA loan was paid in full, but you haven’t applied for restoration. You’ll need to do so in order to access your VA loan entitlement.
- You’re tapping equity with a VA cash-out refinance. You’ll need to apply for a restoration of entitlement for cash-out refinance purposes only. The VA will restore your entitlement and apply it to the new mortgage.
Learn more about restoring VA entitlement at VA.gov.
Frequently asked questions
You may be eligible for VA entitlement if you meet the following minimum service requirements:
- You’re an active-duty service member who has served for 90 consecutive days.
- You’re a veteran, National Guard member or Reserve member who meets the active-duty requirements for your dates of service.
- You’re the spouse of a veteran who died in the line of duty or from a service-connected disability.
As of Jan. 1, 2020, there’s no longer a maximum VA loan amount. However, there is a maximum VA entitlement, which is calculated as 25% of your loan amount for any loan over $144,000.
For veterans with only remaining entitlement available, the maximum guaranty is calculated using the Federal Housing Finance Agency’s (FHFA) conforming loan limits, which are set by county. Don’t confuse these loan limits with a maximum loan amount — as noted in the question above, the VA doesn’t set a maximum VA loan amount. Instead, the loan limits represent the maximum amount you can borrow without having to make a down payment.
Yes, you can use your VA loan entitlement as many times as you want, as it’s a lifetime benefit. If you use part of your entitlement for a first loan, you can still take out subsequent loans as long as you have enough entitlement left to cover it. In addition, if you sell the home or own your home outright, you can apply to have your full entitlement restored.
If you qualify for a VA loan, you have a major advantage in how much you can afford to take out for a home loan. Use the LendingTree home affordability calculator to estimate what amount that is for you, based on your income, debt and the likely monthly costs of owning a home.