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As a military family, moving is a reality. You’ll likely be moving around A -LOT! You’ll get new orders come in, and you’ll be off to a new state, a new duty station and a new city. Military Spouse, Kristin Bentley experienced a cross country move as an active duty family, “After ten years at Ft. Benning we moved to Washington. That was a big move for us, from one corner of the country to the other side.”

Well Kristin, we want you to know you’re not alone! While traveling the country as a family, we don’t want you to miss out on the joys of homeownership. Bentley continues, “ We didn’t know what to do, so when we moved to JBLM, we moved on post.”  Choosing to live on post is a common choice, but it’s not your only choice as an active duty family.

In some cases, the U.S. Department of Veterans Affairs (VA), which insures VA loans, will make it possible for a second home as you move duty stations or head into retirement.  Moving after retirement is also common, Kristin Bentley and her retired spouse moved again, “After retirement our family moved yet again, to Nevada, and we absolutely love it!” Get all of our tips for what kinds of questions to ask your Loan Officer here.

According to Rita Williams on Home.com, here are the types of homes you’ll be able to buy with a second VA Loan: “Single-family houses, townhouses, condominiums, manufactured homes and multifamily properties with up to four units.” She continues that,  “The number one rule when it comes to VA-acceptable properties is that the home must be your primary residence, not a vacation home […] If you’re in the market for a second VA loan, you must plan to live in your new home full-time, meaning at least six months out of the year.”

So what does that mean if you want to buy an investment property? Can you do that? Williams says, “You can’t buy an investment property with a VA loan, either. But you can purchase a multifamily property as long as you’ll live in one of the units. You can rent out the other units for extra income. If you keep your first home after you move to the new house, you can turn the first into a rental property as well.”

If you are experiencing divorce, you might also need a new home. Co-founder of team VA the Fairway Ethan Wilson says, “Divorce is something we see fairly often. Our team is compassionate and ready to help. Don’t be embarrassed to call us, we’re here to help.”

The reality is that a VA loan can help you get into a new home, with little to no downpayment. It’s also possible you’ll have no monthly mortgage insurance. Of course, this is if you meet the VA Loan requirements and have enough remaining entitlement to qualify. That is what our team is here for. Set up a call with us today to see if you qualify! In addition to an appointment with us, you’ll want to research online and rely on your community for their experiences too, “When moving I look online, I am a researcher and I love to have all the information. I love websites like this! But I also ask around and collect others experiences. It’s really important for me to listen to our community and their experiences” Bentley remarked.

Qualification is not as complicated as it may seem. So how do you qualify for a second VA Loan? Rita Williams lays it out perfectly, “To qualify for a second VA loan, you’ll need your Certificate of Eligibility (COE) from the VA. The COE verifies your VA eligibility: whether you meet the minimum service requirements for VA borrowers and how much entitlement you have remaining. There are a four ways you can buy an additional home with a VA loan.”

nice curb appeal of american craftsman style house.

Let’s break down these 4 options: (thank you Rita!)

Option 1: Use your remaining entitlement

VA entitlement is the dollar amount the Department of Veterans Affairs will guarantee on each VA home loan. It helps determine how much a veteran can borrower without a down payment.

VA entitlement is typically the greater of $36,000 or 25% of the loan amount.

If you used your VA loan entitlement to buy your first home and the loan is still open, you might have remaining entitlement.

With partial entitlement, also known as “bonus entitlement,” you may be able to buy an additional house with no down payment, depending on:

* The original purchase price of the current home

* The county loan limit where the current home is located

  • Price of the new home
  • The county loan limit where the new home is located

Option 2: Make a down payment

If you don’t have enough entitlement remaining, you’ll have to put some money down.

Remember that the VA “guarantees” 25% of the loan amount. This means it will pay the lender up to 25% of the loan amount if the borrower defaults.

As such, lenders require 25% “coverage” for zero-down VA loans.

It can get that coverage from VA, or it can get it from you in the form of a down payment.

Let’s say you had $50,000 entitlement remaining. You could buy a $200,000 house – four times the entitlement amount. But you want to buy a $250,000 house. You can’t do it with zero down in this case. But you could come up with a down payment. Home price: $250,000. Maximum loan amount with remaining entitlement: $200,000. Difference: $50,000. Down payment required: 25% of $50,000, or $12,500.

So if you have some remaining entitlement, but not quite enough, consider making a down payment for 25% of the difference.

You may be able to use gift funds or down payment assistance to cover the difference. Loan officer Ethan Wilson tells us, “Different states have different programs. Definitely ask your dedicated loan officer what is available in your state.”

Option 3: Refinance the existing VA loan into a non-VA loan, or pay it off

If you have no entitlement available, you won’t be able to take out another VA loan until the current mortgage is paid off. Once it’s paid off by your own funds or refinanced into a non-VA loan, you can request a restoration of entitlement from the VA. Keep in mind that you can only do this once if you plan to keep the first home.

Option 4: Sell the home

If none of the above options work for you, you can always sell the home. If the loan is paid off in full with the sale, you can request an entitlement restoration. You can request entitlement restoration as many times as you like as long as you sell the home each time.

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Now that we’ve broken down the four options, what do you think is the best option for you? If you aren’t sure, give us a call at (888) 301-3465 and one of our dedicated loan officers will walk you through your eligibility.  You can also click here to see if you qualify. If you are still in research mode like Military Spouse Kristin Bentley, that’s ok too. We have a no- pressure group on Facebook, where you can come ask all our questions, join that group here.

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