VA Mortgages For “Second Homes”

One common question about VA mortgage loans involves whether an eligible VA borrower can use his or her VA loan benefit to purchase a home even if the borrower already owns property. The answer depends greatly on whether or not the borrower already has a VA mortgage, and how the new property is intended to be used.

VA mortgage loans are intended for owner-occupiers, so a borrower purchasing a single-family home, condo, townhouse, or multi-unit property must live in the home as the primary residence. This is required of all new purchase VA mortgages and is a condition of loan approval. VA loans can’t be used for investment properties or to rent out to others. Renting unoccupied units of a multi-unit property is permitted, but the borrower must live in one of the units.

Borrowers who already own homes may be eligible for a VA loan if they intend to purchase the property and make it their primary residence. “Primary residence” means living in the property full-time, rather than using it as a vacation home or occasional living space.

The mere fact that a borrower owns another property doesn’t disqualify them from buying the new home with VA benefits. The VA official site,, states:

“If you are an eligible veteran and still have remaining entitlement or have had your entitlement restored, you can get a second property using a VA Loan. You must occupy or intend to occupy the property as your primary home within a reasonable period of time after closing the VA Loan.”

The entitlement issue is crucial-borrowers who have used some entitlement already may not have enough original entitlement remaining, but in some cases the applicant may be eligible for “bonus entitlement” that can fill in the gap.

In other cases it may simply be a matter of having the entitlement restored. This is true when a borrower had a VA loan, but paid it off either by selling the home, paying off the loan at the end of the loan term, or paying off the loan early. Having your VA loan entitlement restored is not automatic, you’ll need to work with your loan officer or contact the Department of Veterans Affairs to begin the process.

The “bonus entitlement” option is also not automatic, and is contingent on the amount of the loan. For VA bonus entitlement, the loan must be in excess of $144,000. A down payment may be required depending on circumstances. If there’s a gap between the borrower’s entitlement and the full VA loan guaranty amount, the borrower would have to make up the difference in cash.

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