When the Veterans Affairs Department sorts out the 700,000-plus annual users of VA-backed home loans, the most common demographic puts one of the most common VA loan myths to rest. Or it should, at least.
Multiple real-estate experts, including those published on VA’s own blog, lament the misconception that VA loans can be used only once per veteran. There are a number of potential reasons why this belief still holds sway ― beneficiaries can only use the VA loan for a permanent residence, and there is a cap on how much can be guaranteed ― but that doesn’t make it any less wrong.
VA classifies those who receive more than one VA loan under “restored entitlement,” meaning they can obtain a second (or third, or more) loan “because the loan was paid in full and property disposed of.”
And repeat business is big: Of the VA loans issued in fiscal year 2016, nearly 44 percent of recipients had restored entitlement. The loans that went out to nearly 310,000 repeat customers totaled $83.3 billion, per the VA’s 2016 budget report.
That figure far outdistances other groups of beneficiaries: Gulf War-era veterans made up 28.6 percent of VA loan users, for instance, and under VA’s definition, that category spans all veterans from August 1990 to the present.
Borrowers still in uniform made up 12.5 percent of the total.
Many of these loans are refinances, so some borrowers are re-engaging with VA without changing their address.
And while repeat VA borrowers can return to the program after paying off their initial loan, it is possible to have more than one VA loan at a time, providing the combined benefit doesn’t exceed a veteran’s benefit cap. If the second loan doesn’t fit under that threshold, it may be possible to make up the difference via a down payment. Read more about VA’s loan limits here.
Ready to start (or restart) your loan process? Visit our VA Loan Center.