David Krichmar is a mortgage banker and broker in the Houston area.
Contrary to popular belief, a home buyer can have two VA loans.
They may want two VA loans if they are moving and not selling their current home, or would like to buy a new home without selling their current home.
The calculation to find out if you can have two VA loans can be a little confusing. Here are the steps to follow when figuring out if your buyer can have two VA loans:
- Order Their Certificate of Eligibility – your mortgage lender can do this. It requires the veteran to provide the DD-214 form. If they do not have the DD-214 form, they will want to find it.
- Their Entitlement – on the Certificate of Eligibility, it will show the remaining balance of the veteran’s entitlement. The majority of veterans will start with an entitlement of $36,000. So the remaining balance will be less than this amount.
- Calculate – next, the lender will want to take the amount of their entitlement that they have used and subtract it from $104,250 (the maximum guarantee authorized by the VA is 25 percent of the loan amount up to $104,250). So, if they used $30,000 of your entitlement, it is $104,250- $30,000, which equals $74,250
- The Max for the Second VA Loan – take the number from #3, $74,250, and divide it by .25. This will give you the max amount your new VA loan can be, which, in this example, would be $297,000.
Keep in mind, this calculation is only to see if the veteran can get a second VA loan. This does not automatically mean the veteran can qualify for another mortgage. That would be determined on his or her income, assets, credit score, etc. This calculation for a 2nd VA loan is for loan amounts of $144k and higher. For loans under $144k, there is a different calculation.
Granted, this is quite a bit of information for a anyone to remember. So bookmark this article and come back to it when you have a veteran who needs a second mortgage. It is also important to remember this article because many loan officers are under the impression you cannot have two VA loans – which is just not true.
David Krichmar can be reached in a number of ways:
Twitter: @DaveMortgageGuy