How to free up you VA Loan Entitlement

[Eric Dufault]

Good Afternoon BP,

This is a question for fellow veterans who have bought a duplex or multi-family in the past and then went on to move out of the property to purchase a second.  After a few years of searching I have found my ideal duplex (I'm way too picky) and am looking to buy it with no money down and inhabit it until I want to improve my living situation.  Ideally I would do this with a more expensive duplex after a year or two.  The home I am interested in purchasing is going to be around $265K in MA.  The max entitlement in my county is $417K.

The Big Question is how do I free the $417K back up when I'm ready to move on.  Can I refinance the initial loan into a different type of loan through a different bank ?  Do I need a certain amount of equity in the property in order to do that?  Since I'm going to be $250K in debt, am I going to run into major issues qualifying again.  Will I be able to prove income when this happens?

I feel as though I've always just assumed that it would work itself out without performing my due diligence. I also love the idea of not paying a mortgage and living for free which is why I've liked the Duplex/VA Loan idea. It seems like there isn't a lot on the message boards about what to do after your first purchase though. Hopefully we can get a string here that clears it up and lays a blueprint for us veterans moving forward.