Restoration of entitlement is not automatic. You must apply for it by completing and returning VA Form 26-1880 to any VA regional office or center. Application forms for substitution of entitlement may he requested from the VA office that guaranteed the loan.

If the requirements for restoration cannot be met, is there any other way a veteran can obtain another VA home loan?
Yes. Veterans who had a VA home loan before may still have "remaining entitlement" to use for another VA home loan. The current amount of entitlement available to each eligible veteran is $36,000 ($50,750) for certain loans over $144,000). This was much lower in years past and has been increased over time by changes in the law. For example, a veteran who obtained a $25,000 loan in 1974 would have used $12,500 guaranty entitlement, the maximum then available. Even if that loan is not paid off, the veteran could use the $23,500 difference between the $12,500 entitlement originally used and the current maximum of $36,000 to buy another home with VA financing.

Most lenders 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. Thus, in the example, the veteran's $23,500 remaining entitlement would probably meet a lender's minimum guaranty requirement for a no down payment loan to buy a property valued at, and selling for, $94,000. The veteran could also combine a down payment with the remaining entitlement for a larger loan amount.

May several veterans use their entitlement to acquire property together?
Yes. The guaranty is based on each veteran s interest in the property, but the guaranty on the loan may not exceed the lesser of 40 percent of the loan amount or $36,000 ($50,750 for certain loans over $144,000).

If both a husband and wife are eligible, may they acquire property jointly and so increase the amount which may be guaranteed?
They may acquire property jointly, but the amount of guaranty on the loan may no exceed the lesser of 40 percent of the loan amount or $36,000 ($50,750 for certain loans over $144,000).

Does the issuance of a certificate of eligibility guarantee approval of a VA home loan?
No. The veteran must still be found to be qualified for the loan from an income and credit standpoint.

How much is the guaranty?
VA will guarantee up to 50 percent of a home loan up to $45,000. For loans between $45,000 and $144,000, the minimum guaranty amount is $22,500, with a maximum guaranty, of up to 40 percent of the loan up to $36,000, subject to the amount of entitlement a veteran has available. For loans of more than $144,000 made for the purchase or construction of a home or to purchase a residential unit in a condominium or to refinance an existing VA guaranteed loan for interest rate reduction, the maximum guaranty is 25 percent up to $60,000. 

Is $36,000 the biggest loan a veteran can get?
No. You may generally borrow up to the reasonable value of the property or the purchase price, whichever is less, plus the funding fee, if required. For certain refinancing loans, the maximum loan is limited to 90 percent of the value of the property, plus the funding fee, if required. To determine the reasonable value, VA requires an appraisal of the property.

What is the maximum VA home loan?
Although there is no maximum VA home loan (limited only by the reasonable value or the purchase price), lenders generally limit the maximum VA home loan to $240,000 because most VA home loans are sold in the secondary market, which limits VA home loans to that amount.

Is a guaranteed loan a gift?
No. It must be repaid, just as you must repay any money you borrow. The VA guaranty, which protects the lender against loss, encourages the lender to make a loan with terms favorable to the veteran. But if you fail to make the payments you agreed to make, you may lose your home through foreclosure, and you and your family would probably lose all the time and money you had invested in it.  If the lender does take a loss, VA must pay the guaranty to the lender, and the amount paid by VA must be repaid by you. If your loan closed on or after January 1, 1990, you will owe the Government in the event of a default only if there was fraud, misrepresentation, or bad faith on your part.

Does VA make any loan directly to eligible veterans?
Yes, but only to Native Americans on trust land or to supplement a grant to get a specially adapted home for certain eligible veterans who have a permanent and total service-connected disability(ies). 

Can a veteran get a VA home loan to pay off the mortgage or other liens of record on his or her home?
Yes. The following refinancing loans are available under the VA guaranteed home loan program:

a. To pay off the mortgage and/or other liens of record on the home. In most cases, the loan may not exceed 90 percent of the reasonable value of the property as determined by an appraisal, plus the funding fee, if required. The loan may include funds for any purpose which is acceptable to the lender, plus closing costs, including a reasonable number of discount points. A veteran must have available home loan entitlement. An existing loan on a manufactured home (except as noted below) may not be refinanced with a VA guaranteed loan.

b. To refinance an existing VA home loan to obtain a lower interest rate. Use of additional loan entitlement is not required. The loan amount is limited to the balance of the old loan plus the closing costs, discount points, funding fee, and up to $6,000 in energy efficient improvements. An existing VA home loan on a manufactured home may be refinanced to obtain a lower interest rate.

Can a veteran get a VA business loan?
No. but business loans may be obtained through the SBA (Small Business Administration). The SBA gives preference to veterans wishing to obtain small business assistance. For more information on this financing, consult your telephone directory for the SBA office nearest you.

Can a veteran get a VA home loan to buy or construct a residential property containing more than one family unit?
Yes, but the total number of separate units cannot be more than four if one veteran is buying. If more than one veteran is buying, then one additional family unit may be added to the basic four for each veteran participating; thus, one veteran could buy four units; two veterans, six units; three veterans, seven units, etc.

In addition, if the veteran must depend on rental income from the property to qualify for the loan, the veteran must (a) show that he or she has the background or qualifications to be successful as a landlord, and (b) have enough cash reserves to make the loan payments for at least 6 months without help from the rental income.

Can a veteran obtain a VA home loan for the purchase of property in a foreign country?
No. The property must be located in the United States, its territories, or possessions. The latter consist of Puerto Rico, Guam, Virgin Islands, American Samoa and Northern Mariana Islands.

Can a veteran obtain a loan from a private lender in one State for the purchase of property in another State?
Yes. However, many lenders limit their lending operations to certain areas.

May a lender require security from the veteran in addition to the property being purchased?
Yes. This is a matter between the veteran and the lender. While VA does not require that additional security be taken, it does not object if the veteran is willing.

If a lender is unwilling to accept a veteran's application for a loan, what should the veteran do?
The veteran should see another lender. The fact that one lender is not interested in making the loan the veteran wants does not mean that other lenders will not make the loan.

May a veteran pay off a VA home loan before it becomes due?
Yes. A VA home loan may be partially or fully paid at any time without penalty. Partial payments may not be less than I monthly installment or $100, whichever is less. (Consult your lender.)

If a veteran dies before the loan is paid off, will the VA guaranty pay off the balance of the loan?
No. The surviving spouse or other co borrower must continue to make the payments. If there is no co borrower, the loan becomes the obligation of the veteran's estate. Protection against this may be obtained through mortgage life insurance, which must be purchased from private insurance sources.

Will the veteran's payments always be paid to the same company?
No. It is common practice in the mortgage lending industry to sell mortgages, often before the first payment is even due. If your loan is sold, you may find that you sent your first payment to the wrong place and the new holder of your loan may send you an overdue notice. Even though you know you made the payment, and is is up to the two lenders to get it straightened out, do not ignore the notice. (Most lenders will notify the veteran if the loan is sold and help straighten out any problems.)