Can You Use Your VA Loan Again After You Sell in Sacramento?

On Veterans Day, a lot of the questions we hear come from veterans who have used their VA home loan once and assume that was it. They sold the first home, moved for work or family, and now want to buy again in Sacramento.

The VA home loan benefit can be used more than once. What matters is your entitlement, and how it comes back. At Surroundings, Maggie is a Certified VA Loan Specialist, and this is one of the first things she checks.

Yes. VA.gov explains that you may be able to restore entitlement you used on a past loan, or use remaining entitlement to buy or refinance another home.

Entitlement is the amount the VA guarantees to your lender. When it is restored in full, you can buy again much like a first-time VA buyer. When only part is available, the math changes.

VA.gov lists three ways to restore past entitlement. You may qualify if at least one of these is true:

• You sold the home you bought with the prior loan and paid that loan in full
• A qualified veteran buyer agreed to assume your loan and substitute their entitlement for the same amount you used
• You repaid the prior loan in full but kept the home, which you can only do once

For most sellers, the first route applies. The sale pays off the VA loan at closing, and the entitlement can then be restored.

You request a new Certificate of Eligibility that shows the restoration. VA.gov says you can request a COE with entitlement restoration online. Your lender can also request it for you, or you can file VA Form 26-1880.

Keep the paperwork from your sale. VA's guidance points to a paid-in-full statement from the old lender or the closing statement from the sale as proof the loan was paid off. Having it ready avoids delays.

You may still have remaining entitlement. VA.gov says that if you do not meet any of the restoration requirements, you may still have remaining entitlement to buy or refinance another home with a VA-backed loan.

VA.gov explains that remaining entitlement is figured from the county loan limit where you plan to buy, minus what you have already used. With partial entitlement, a larger Sacramento purchase may need some money down. We read your COE with you and run the numbers before you shop.

Often, yes. VA.gov's funding fee table lists a higher fee for use after the first VA loan. For a purchase with less than 5% down, it lists 2.15% for first use and 3.3% after first use. The fee drops with a larger down payment, and it can usually be financed into the loan.

Some borrowers pay no funding fee at all. VA.gov lists exemptions, including veterans receiving VA disability compensation and surviving spouses receiving Dependency and Indemnity Compensation. If you think you qualify, make sure the exemption shows on your COE before closing.

Yes. A VA-backed purchase loan is for a home you will live in. If you are keeping a first home as a rental and buying a new home to live in, the new purchase is the one that must meet that occupancy rule.

The new home also has to appraise and meet the VA's minimum property requirements. Many Sacramento homes are older, so we look for likely appraisal issues before you write an offer.

Then your entitlement may stay tied up. VA.gov says entitlement can be restored through an assumption only when a qualified veteran buyer assumes your loan and substitutes their own entitlement for the same amount you used.

If a non-veteran buyer assumes the loan, the original loan is still in place, and your entitlement is not restored that way. Ask about this before you agree to an assumption, because it affects your next purchase.

Start with your Certificate of Eligibility. It shows how much entitlement you have and whether a restoration is on file. Then get a pre-approval based on what the COE shows.

Our page on VA and military buyers in Sacramento covers the search and the offer. VA loans explains the loan itself, and the Buyer's Guide walks through each step. Maggie shops VA loans across a network of approved lenders, and you are free to use any lender you like.

All loans are subject to underwriting and approval. Contact us, or call Maggie at (916) 549-3131. Thank you for your service.

Maggie B. Hopkins, NMLS #349517. This article is general information, not financial advice.