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Multiple VA Home Loans: Fact or Fiction?

You’ve found a job and need to move. You can’t sell your home but you don’t want to rent. You don’t have money for a down payment and want to re-use your VA benefits. But you already have a VA loan on your current home. Can you have multiple VA home loans at the same time, you ask? The answer is a resounding Yes!

Economy’s like we have today can make it difficult to sell a property. In some parts of the country property values have been cut in half from peak to trough. Homeowners are unwilling or unable to sell in these conditions. Veterans must leave their current home behind.

Second home and investment property purchases are never allowed with the VA. Therefore, the additional VA loan must be for the purchase of a new primary property. In most cases, the client needs to change locations. The relocation may be caused by an employer mandated job change, an increase in family size or lifestyle change. VA does not mandate they reason for the move.

When situations like these arise veterans are in luck. Since the VA allows multiple VA home loans a new purchase can be made while retaining the existing VA home loan.

Your lender will first need to check the available VA entitlement that remains. This will determine the maximum loan amount that you are eligible for. If you’re seeking a larger loan than you’re eligible for you can guarantee the difference yourself.

Having multiple VA home loans has additional benefits. You’ll have to pay the subsequent-use VA funding fee which stands at 3.30%. But the VA home loan does not have mortgage insurance and requires no down payment. Additionally, the VA does not require that you have equity in your existing home to use proposed rental income. The combination of these benefits will reduce your debt to income ratios. This makes it possible to purchase a new home where it may not be possible with FHA or conventional loan programs.

Many veterans plan to rent their existing home since they can’t sell it. The rental income will help them offset their mortgage payment. Conventional loans require 30% equity to use rental income. This is not so with VA home loans. If there’s no lease on the property, but the local rental market is very strong, your lender may still consider the prospective rental income to offset the mortgage. This rental income may NOT be included in effective income.

So if you need to move and prefer re-using your VA benefits, then having multiple VA home loans is an option for you.

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