What if I've used a VA Home Loan Before and I want my entitlement restored?
You can have previously-used entitlement "restored" one time only in order to purchase another home with a VA loan if the borrower has paid off the prior loan but still owns the property, and wants to use his entitlement to purchase a second home. This often occurs with active duty borrowers who PCS to a new station but want to keep their existing home for retirement. However if the prior loan has been paid off, AND the property is no longer owned, they can have their entitlement restored as many times as they want. They can re-use their VA eligibility for every home purchase from the first to the last.
Also, veterans who have used a VA loan before may still have remaining entitlement to use for another VA loan. A veteran's maximum entitlement is $89,912, and lenders will generally loan up to four times your available entitlement without a down payment, provided your income and credit qualifications are fine, and the property appraises for the asking price. Lenders may require that a combination of the guaranty entitlement and any cash down payment must equal at least 25 percent of the reasonable value or sales price of the property, whichever is less.
Remaining entitlement and restoration of entitlement is not automatic. It can be requested through the nearest VA office by completing VA Form 26-1880. The entitlement may also be restored one time only if the veteran has repaid the prior VA loan in full but has not disposed of the property purchased with the prior VA loan.

Posted By: Jennifer Hernandez on Sunday, February 06, 2011