Can I Get a Second VA Loan and Keep My First House? | The Borges Real Estate Team
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The Borges Team

Pasadena
(213) 262-5092

Can I Get a Second VA Loan and Keep My First House?

Yes, you can get a second VA loan while keeping your first house. Many veterans use their remaining or second-tier entitlement to purchase a new primary residence while converting their first home to a rental. The new property must be your primary residence - VA loans can't be used for investment properties directly.

How Second VA Loans Work

Your VA entitlement isn't a one-time benefit. You can use it multiple times throughout your life, even simultaneously on different properties. Here's how:

Situation Second VA Loan Possible? Down Payment?
Remaining entitlement covers new loan Yes None
Use second-tier entitlement Yes Usually none in high-cost areas
Entitlement gap exists Yes Partial (25% of gap)
Full entitlement restored after payoff Yes None
Not sure how much entitlement you have left? I can help you review your Certificate of Eligibility and calculate your options.
Call or Text (213) 262-5092

Understanding VA Entitlement

VA entitlement is the amount the VA guarantees on your loan. There are two tiers:

Basic Entitlement

This is $36,000 and typically gets used on your first VA loan. When used, this alone allows the VA to guarantee loans up to $144,000 without a down payment.

Second-Tier (Bonus) Entitlement

This is additional entitlement beyond the basic amount. In 2024, the second-tier entitlement allows for zero-down purchases well above $1 million in most high-cost areas like Los Angeles County.

Here's the key: Even if your basic entitlement is tied up in your first home, you can tap into second-tier entitlement for a new purchase.

Example: LA County Veteran Common Scenario

You bought a home in 2020 for $500,000 using your VA loan. Now in 2026, you're relocating to Pasadena and want to keep the first home as a rental.

Your second-tier entitlement allows you to purchase a new primary residence - potentially up to $1,089,300 (2024 LA County limit) - with zero down payment, even while your first VA loan is still active.

The Math: How Much Can You Borrow?

The calculation can get complex. Here's a simplified view for LA County:

LA County Entitlement Calculation (2024)
County Loan Limit $1,089,300
Max VA Guaranty (25%) $272,325
Basic Entitlement Used -$36,000
Remaining for Second Loan $236,325

That $236,325 in remaining guaranty supports a second VA loan of approximately $945,300 with zero down payment - even while your first VA loan is still active.

Important Note

If your new purchase price exceeds what your remaining entitlement supports, you'll need a down payment of 25% of the difference. But in most cases, second-tier entitlement covers purchases well above $900K in LA County.

Requirements for a Second VA Loan

1. New Primary Residence

The new property must be your primary residence. You can't use a VA loan to buy a second home or investment property directly. However, once you move into the new home, you can rent out your previous VA-financed home.

2. Qualify on Both Mortgages

Your lender will evaluate your ability to pay both mortgages. If you're renting your first home, 75% of the rental income typically counts toward your qualifying income.

3. Sufficient Entitlement

You need enough remaining or second-tier entitlement to cover the new purchase, or be willing to make a down payment for any gap.

4. Meet Standard VA Requirements

Credit, income, and property requirements still apply just like any VA loan.

How to Restore Your Full Entitlement

If you want to maximize your future VA borrowing power, here's how to get your entitlement back:

Full Restoration

  • Sell and pay off - Sell the home and pay off the VA loan completely
  • Refinance to conventional - Refinance into a non-VA loan, then request restoration
  • Pay off while owning - Pay off the VA loan balance while keeping the property

One-Time Restoration

The VA offers a one-time restoration of entitlement if you've paid off a previous VA loan but still own the property. This allows you to use your full entitlement again on a new purchase.

Funding Fee Note

The funding fee for subsequent VA loan use is higher - 3.3% vs 2.15% for first-time use. However, veterans with a 10%+ disability rating are exempt from all funding fees. If you qualify, this saves $23,100 on a $700K loan.

Converting Your First Home to a Rental

Once you've lived in your first VA home as your primary residence (typically 12 months minimum), you can convert it to a rental. Key considerations:

  • Notify your lender - Most VA loans don't have occupancy requirements after the initial period, but check your specific loan terms
  • Get landlord insurance - Your homeowner's policy won't cover a rental property
  • Understand tax implications - Rental income is taxable, but you gain valuable deductions
  • Screen tenants carefully - A bad tenant can create problems with your mortgage payments

Ready to Use Your VA Benefit Again?

Whether you're relocating, upgrading, or building a portfolio - let's explore your options.

Call or Text (213) 262-5092

Text works too - No obligation

FAQ

Can I get a second VA loan while keeping my first house?
Yes. You can use remaining or second-tier entitlement to buy a new primary residence while keeping your first home as a rental. The new property must be your primary residence.
What is second-tier VA entitlement?
Bonus entitlement available after using your basic entitlement. In high-cost areas like LA County, it allows zero-down purchases well above $1 million even while your first VA loan is active.
Do I need a down payment for a second VA loan?
Usually not in high-cost areas. If your remaining entitlement covers 25% of the new loan, no down payment is required. Any gap requires 25% of the shortfall as a down payment.
Can I rent out my first home?
Yes, after living in it as your primary residence (typically 12+ months). You can then convert it to a rental while purchasing a new primary residence with your second VA loan.
How do I restore my VA entitlement?
Sell and pay off the VA loan, refinance to conventional, or pay off the balance while owning. One-time restoration is available if you've paid off but still own the property.
Is the funding fee higher on a second VA loan?
Yes - 3.3% vs 2.15% for first use. But veterans with a 10%+ disability rating are exempt from all funding fees, saving $23,100 on a $700K loan.
JB

Justin Borges

Realtor | Veterans United Partner | DRE# 01940318

Disclaimer: This article provides general information about VA loan entitlement and is not financial advice. VA guidelines change and entitlement calculations vary by situation. Consult with a VA-approved lender for your specific entitlement status and options. The Borges Real Estate Team is not a lender.