Around 85% of active duty military families live off-base, which tends to be a surprise to the civilian public. This means that the majority are renting and buying homes temporarily. There’s always been ongoing confusion on the VA Home Loan benefit for many military and veteran families but with the passage of the Blue Water Navy Vietnam Veterans Act, it's now clearer than ever.
The biggest question that is consistently asked is how many times you can utilize the VA home loan benefit. This is a fair question considering active duty military families are moving every two to three years. Before the law’s passage, you could probably use the benefit twice but would be cutting it close, mainly because the original limit was $500,000. Although it seems like a good amount, it wasn’t - especially when you factored in higher cost-of-living areas. But with the law’s passing, the borrowing limits went out the window!
So what does it look like now for loan borrowers who want to use their benefit a second time? It’s actually pretty easy. Although there is no limit to borrowing (as long as the amount you are borrowing doesn’t exceed the value,) there are county limits. This refers to having an outstanding VA Home Loan and means that you can only borrow up to whatever that county limit is.
If you are attempting to run two VA Home Loans at a time, it is possible but limited. There is a calculator involved to determine how much you are eligible to borrow under the limits, with the member or veteran having to come out of pocket or find other means to complete the loan requirements. You can find out more about county limits here.
The good news is that most active duty military families sell homes and then buy a new one near the new duty station. If you do this, your full VA Home Loan benefit is restored. There you have it - you can absolutely use your VA Home Loan a second time. It’s a little tricky if you are keeping the property (but can be done) but it’s a breeze if you’ve sold or paid off your first VA Home Loan.
When you utilize your VA Home Loan benefit after the first time, the VA funding fee does go up. It currently sits at 2.3 percent for first time users and goes to 3.6 percent for every benefit use after that first time. Those who have service-related disabilities and are the recipients of Purple Hearts do not have to pay the funding fee at all, thanks to the passage of the Blue Water Navy Vietnam Veterans Act. There are some other ways this fee is waived; to see a full list you can visit the VA website to learn more.
The VA Home Loan benefit isn’t a one-time thing. You can actually have two at the same time and continue to use the benefit over and over as long as the eligibility requirements are met. The VA has been guaranteeing loans for its veterans and service members since 1944 and the ability to borrow safely and securely has gotten easier and easier as the years have passed. So, what are you waiting for?
If you are a servicemember on active duty, prior to seeking a refinance for your existing mortgage loan, please consult with your legal advisor regarding the loss of any benefits you are entitled to under the Servicemembers Civil Relief Act or applicable state law.