The VA home loan program offers some features and advantages that are hard to beat. It allows eligible borrowers to buy a house with no money down and has some of the most flexible qualification criteria of any mortgage program.
Because of this, many homeowners who use the VA loan program want to use it again after selling their current home. And a lot of them have the same questions: How soon can you use a VA loan again? Is there a required waiting period after selling the house and paying off the loan?
We’ll start with the short answer and then take a deeper dive into this subject.
The good news is the Department of Veterans Affairs does not require any kind of waiting period for a person who wants to use the VA loan program again. If you restore your entitlement by selling your home and paying off the loan (and still meet the basic eligibility criteria), you can apply for another VA loan anytime you want.
You Can Use a VA Loan More Than Once
One of the great things about the VA home loan program is that you can use this benefit more than once. In fact, if you meet the basic eligibility requirements including your military service, you could use VA loans repeatedly over many years.
This program is built around a concept known as “entitlement.” The Department of Veterans Affairs defines entitlement as “the amount available for use on a loan.”
Entitlement is the amount of money that the Department of Veterans Affairs (VA) promises to repay back to a lender, in the event that you default on your mortgage. Entitlement helps determine how much a person can borrow before needing a down payment.
But it’s important to note that VA entitlement is not the same as the maximum loan amount that a person can borrow. That’s up to the mortgage lender to decide, and it will largely depend on your current income and debt situation.
When you take out a VA-guaranteed mortgage loan to purchase a home, you use up some of your entitlement. The amount used depends on the size of the loan and other factors. If you sell your home and pay off your VA loan in full, you can get your entitlement back.
This means you can use the program again in the future, to buy another house.
And that brings us back to the question we started with. How soon can you use the VA loan program again, after a previous home purchase?
There Is No Specific Time Requirement
As mentioned in this article’s introduction, there is no specific time requirement or waiting period when it comes to using another VA loan.
If you use a VA-backed mortgage to buy a house, and then later pay it off through the sale of your home, you will restore all of your entitlement in the program. This means you can use another VA loan just as you did the first time, and there is no specified period of time that has to elapse before you can do so.
Here is a relevant quote from the U.S. Department of Veterans Affairs website. This quote comes from an FAQ page, where they are answering a question about getting another VA loan:
“Yes, your eligibility is reusable depending on the circumstances. Normally, if you have paid off your prior VA loan and disposed of the property, you can have your used eligibility restored for additional use. Also, on a one-time only basis, you may have your eligibility restored if your prior VA loan has been paid in full but you still own the property.”
How to Restore Your Eligibility
In order to have the eligibility and entitlement restored, a service member or veteran must complete VA Form 26-1880. This is the “Request for a Certificate of Eligibility.”
If you have used a VA home loan in the past, you probably had to complete this form the first time around as well. You’ll have to complete it again when using another VA-guaranteed mortgage loan. The lender needs the COE document to process your application.
Section III of this form requests information related to previous VA loan usage. After you provide this information and submit the form, the Department of Veterans Affairs will review it and (if warranted) restore your program eligibility. They will then send you a new Certificate of Eligibility that you can use to apply for another VA loan.
How to Expedite the Process
This is an administrative process that has to take place before you can use the program again. The amount of time it takes will vary depending on processing backlogs and other factors that are beyond your control.
But there are some things you can do to help expedite the process. For starters, make sure you fill out the VA Form 26-1880 completely and accurately, to avoid having to redo it.
The VA also encourages borrowers to provide evidence that the prior loan has been paid in full and, if applicable, that the property has been sold. You can do this by obtaining a paid-in-full statement from your former lender or loan servicer, or a copy of the HUD-1 settlement statement associated with the home sale.
It’s very common for military members and veterans to use the VA loan program more than once. How soon you can use another VA loan will depend on your entitlement status and the paperwork process mentioned above. Just know that it’s a very common scenario.
For example, an active-duty military member might use this mortgage program to buy a house near their current duty station. A few years later, they might sell the home before transferring to their next duty station through a PCS move.
By selling the home and paying off the original loan, the service member could restore their entitlement and use another VA loan at their next assigned location.