2 va loans together : What is our buying power?

[Vincent E peters]

With two va loans together how do you determine buying power when va loan has no cap? We are super fortunate to have the va loan and I want to ensure we utilize it to its full potential. I understand we can buy a fourplex and even surpass four units by combining our loans but varies on the lender. Def not going to buy right now just trying to formulate a game plan where we can be positioned to jump when we see an opportunity. 

[Joel Allen]

@Vincent E peters

Thanks for your service. My wife and I are in a similar situation….we each have VA entitlement through our military service. The VA loan is a powerful tool, and when you both have entitlement, it compounds the possibilities.

You each will have a Certificate of Eligibility showing your individual entitlement.  If you have full entitlement, there is no loan limit as long as the lender can qualify you.  It’s when you utilize the secondary entitlement that the county loan limits apply.

You're correct…a VA loan can be used on a 1-4 unit property, as long as you occupy one of the units as your primary residence for at least a year. In an ideal scenario, you could house-hack a 4-plex using one of your initial entitlements, then a year later house-hack another 4-plex using the other person's initial entitlement. Then, if there is still secondary entitlement remaining, that opens the door to more options a year later.

There is a provision that allows two VA borrowers to combine their VA loans together and do a ‘joint loan' for a multi family property of more than 4 units. Although I don't personally know anyone that's done it, it's explained in VA Pamphlet 26-7, Chapter 7.

[Carl Davis]

I've also done something similar with our VA loans. There are also other zero down loans for primary residence through navy federal at a higher interest rate so you can keep house hacking.

[Erik Browning]

@Vincent E peters what you are referring to is called "Split Entitlement" and it's my favorite topic.

1. Your entitlement is tied to both the loan amount as well as the county for which you purchased the home. For example, you live in Los Angeles, CA where the county loan limit is $970,800. The VA will "guarantee" 25% of that purchase price before the entitlement is "used up." You can find your county's loan limit using this calculator.

2. You CAN purchase beyond $970,800 in this example for Los Angeles County and the entitlement will still be considered "used up." Again, you can purchase beyond that limit.

3. You can also use up "part" of your entitlement by purchasing a home in Los Angeles County. For example if you purchase a home for half ($485,400) of the county's loan limit, it will eat up 50% of your entitlement, and also leaving the other 50% remaining for future use.

You can also use your VA loan a 3rd and 4th time. Yes, you can. You will have to apply for a "1-Time Restoration," however there are a couple other steps. 1 - you need to refinance both homes into conventional or some other financial product. 2 - you need to apply for a 1-Time Restoration through your mortgage broker.

Couple things with the 1-Time Restoration: this is your ONE AND ONLY TIME in your life that you can do this. Once you request the restoration, you get zero other opportunities to pull this trick. So make sure you do this with homes that are quality investments. Also, you can repeat the "split entitlement" trick as mentioned before, however if you ever want to get any sort of VA benefit beyond these potentially 4 properties, you have to sell every single home associated with a VA loan, even the ones you refinanced.

How do you submit a 1-Time Restoration Request? Ask your broker to complete the paperwork and submit to the VA.

If you'd like to talk to a VA representative about this, call the VA's Regional Loan Center.

You can get 4 homes this way (more if you live in cheap areas) and I recommend all active duty, reservists, and veterans begin their journey this way while also saving to buy using more conventional investment properties using DSCR or conventional properties.

[Vincent E peters]

Quote from @Erik Browning:

@Vincent E peters what you are referring to is called "Split Entitlement" and it's my favorite topic.

1. Your entitlement is tied to both the loan amount as well as the county for which you purchased the home. For example, you live in Los Angeles, CA where the county loan limit is $970,800. The VA will "guarantee" 25% of that purchase price before the entitlement is "used up." You can find your county's loan limit using this calculator.

2. You CAN purchase beyond $970,800 in this example for Los Angeles County and the entitlement will still be considered "used up." Again, you can purchase beyond that limit.

3. You can also use up "part" of your entitlement by purchasing a home in Los Angeles County. For example if you purchase a home for half ($485,400) of the county's loan limit, it will eat up 50% of your entitlement, and also leaving the other 50% remaining for future use.

You can also use your VA loan a 3rd and 4th time. Yes, you can. You will have to apply for a "1-Time Restoration," however there are a couple other steps. 1 - you need to refinance both homes into conventional or some other financial product. 2 - you need to apply for a 1-Time Restoration through your mortgage broker.

Couple things with the 1-Time Restoration: this is your ONE AND ONLY TIME in your life that you can do this. Once you request the restoration, you get zero other opportunities to pull this trick. So make sure you do this with homes that are quality investments. Also, you can repeat the "split entitlement" trick as mentioned before, however if you ever want to get any sort of VA benefit beyond these potentially 4 properties, you have to sell every single home associated with a VA loan, even the ones you refinanced.

How do you submit a 1-Time Restoration Request? Ask your broker to complete the paperwork and submit to the VA.

If you'd like to talk to a VA representative about this, call the VA's Regional Loan Center.

You can get 4 homes this way (more if you live in cheap areas) and I recommend all active duty, reservists, and veterans begin their journey this way while also saving to buy using more conventional investment properties using DSCR or conventional properties.

 Thank you for the insights. I'm going to shoot you a message about a specific strategy I'm thinking about. There's not much on the topic and I want to tread lightly. 

[Erik Browning]

Feel free @Vincent E peters, happy to help!

[Robert Washington]

Quote from @Carl Davis:

I've also done something similar with our VA loans. There are also other zero down loans for primary residence through navy federal at a higher interest rate so you can keep house hacking.

 I never heard of this. The last tie I checked NFCU is offering 5% down on primary homes.

[Carl Davis]

Quote from @Robert Washington:

Quote from @Carl Davis:

I've also done something similar with our VA loans. There are also other zero down loans for primary residence through navy federal at a higher interest rate so you can keep house hacking.

 I never heard of this. The last tie I checked NFCU is offering 5% down on primary homes.

Lookup the military choice loan and the homebuyers choice loan through them. You can call and ask about them as well.

[Michael Lynn]

@Erik Browning If we use one of our VA certs on a property, and the property matures beyond a year, does that mean we have the other spouse's VA cert available for use?

[Carl Davis]

Quote from @Michael Lynn:

@Erik Browning If we use one of our VA certs on a property, and the property matures beyond a year, does that mean we have the other spouse's VA cert available for use?

Since the VA loan is a VA benefit for each service member it does not get removed when members get married to each other.

This means if you use your VA benefit and your spouse still has theirs you may use theirs again.

This is how I understand it to the best of my knowledge but I am not a loan officer so it would be best to check in with one before going off of what I say.