How to Use Your VA Loan Benefit to Buy a House
If you are a veteran, active-duty service member, or eligible family member of a military member, you may have access to a unique mortgage program called the VA loan. This program offers many advantages over other types of loans, such as low interest rates, no down payment, no private mortgage insurance, and more. But can you use your VA loan benefit to buy a house more than once? And can you use your GI Bill benefits to qualify for a VA loan? Here are some answers to these common questions.
Can You Use Your VA Loan Benefit More Than Once?
The answer is yes, you can use your VA loan benefit more than once, as long as you meet the eligibility requirements and have enough entitlement left. Your entitlement is the amount of money that the VA guarantees to repay the lender in case you default on your loan. You can have two types of entitlement: basic and bonus. Basic entitlement is $36,000, and bonus entitlement is up to $68,250, depending on the county loan limit where you are buying. The total entitlement available to most veterans is $104,250.
You can use your VA loan benefit more than once in the following scenarios:
- You have paid off your previous VA loan and sold the property.
- You have paid off your previous VA loan but still own the property.
- You have not paid off your previous VA loan but want to buy another home with a VA loan (this is called having two VA loans at the same time).
In each case, you will need to have enough remaining entitlement to cover the new loan. You can check your entitlement status by requesting a Certificate of Eligibility (COE) from the VA or through your lender. You will also need to meet the income and credit requirements of the lender and the VA.
Can You Use Your GI Bill Benefits to Qualify for a VA Loan?
The answer is yes, you can use your GI Bill benefits to qualify for a VA loan, if you are receiving the Monthly Housing Allowance (MHA). The MHA is a stipend that eligible GI Bill recipients receive to help cover their living expenses while attending school. The amount of the MHA varies depending on the location of your school, your enrollment status, and your eligibility percentage.
If you are receiving the MHA, you can use it as part of your income to qualify for a VA loan. However, there are some things to keep in mind:
- You will need to provide proof of your MHA income, such as an award letter from the VA or a bank statement showing the deposits.
- You will need to show that your MHA income is stable and likely to continue for at least three years from the date of your loan application.
- You will need to have other sources of income besides your MHA income, such as employment, disability compensation, retirement benefits, or spousal income.
- You will need to meet the debt-to-income ratio and residual income requirements of the lender and the VA.
The bottom line is that you can use your GI Bill benefits to qualify for a VA loan, but only if you are receiving the MHA and have enough income and credit to afford the loan payments.
The VA loan program is a great benefit for veterans and military members who want to buy a house. It offers low interest rates, no down payment, no private mortgage insurance, and more. You can use your VA loan benefit more than once, as long as you have enough entitlement left and meet the eligibility requirements. You can also use your GI Bill benefits to qualify for a VA loan, if you are receiving the MHA and have enough income and credit. If you are interested in using your VA loan benefit to buy a house, contact a VA-approved lender today and get started on your home buying journey.