Caller: In 1998, I was uh,careless and walked away from a property I could not sell. I purchased the home with my no money down VA loan. Can I purchase another home using my veteran benefits? This seems like a great time to buy another house....
Answer: Yes, BUT it depends on the amount of entitlement you have left, if any.
To determine the VA Home Loan Benefit we instructed Mr. Veteran to submit this form to the Regional Veteran Affairs Office requesting his Certificate of Eligibility. This certificate allowed us to determine any entitlement due to the veteran.
Upon return Mr. Veteran had a loss of $19,000 suffered by Veteran Affairs. The full entitlement is $36,000 so his remaining entitlement was $17,000. Since we are in a high cost area (the maximum VA loan limit in the Washington DC area is $768,750) we are able to add additional entitlement to the amount and calculate the maximum allowable home sales price.
Here is the formula:
$768,750X 25% = $192,187 Maximum Guaranty
$192,187- $19,000= $173,187 Entitlement Available
$173,187 X 4 = $692,748 Maximum Loan Amount for no money down purchase
(I don't recommend trying this at home, just pick up the phone and call 703-497-3936)
Mr. Veteran had enough remaining entitlement to purchase another home in Port Potomac, a new condo subdivision in Woodbridge, VA,with no money down and seller paid closing costs.
Of course Mr. Veteran had to meet our other lender qualifications:
- Qualifying income and debt ratios
- 620 plus credit score
- Three Years since time of foreclosure
- Satisfactory Rental History
Visit www.mymilitarymortgage.com for more VA Loan tips that other lenders don't want you to know.