Refinancing out of VA to reuse benefit

[Corey Collins]

Hi all,

Thanks for taking a minute to read my post. I'm trying to figure out the best way of how I can use my VA loan to purchase my next property. Here is my current situation:

I own and live in a SFH purchased with VA loan 3 years ago. The loan is a 30 year fixed at 3.25 %. I could reuse the VA loan for a second mortgage but the details are a bit murky from what I understand. Also, the loan guarantee amount would be significantly lower since I still have my 1st VA loan. My goal would be to purchase another small multifamily (2-4 unit) and house hack for another year (just got done doing this with our duplex purchased a year ago).

The way I see it, I have two options. One, sell our current home, free up the VA loan, purchase a new property, fill a kiddie pool of cash from sale proceeds and enjoy. Two, refinance home into a conventional loan, use VA loan to purchase a new property, rent the previous home, forgo the kiddie pool but enjoy the increased cash flow.

All that being said, am I even able to refinance since it would likely be into a higher interest rate? If so, is it even worth it? Is there another option that I'm not considering?

Thanks in advance!

[Matthew Rayl]

Originally posted by @David Lilley:

@Matthew Rayl I've done it.

Google VA entitlement restoration and you should be able to find it.

 I've done it too.  Despite what va.benefits.gov states:

"The entitlement may also be restored one time only if the Veteran has repaid the prior VA loan in full, but has not disposed of the property purchased with the prior VA loan. Remaining entitlement and restoration of entitlement can be requested through the VA Eligibility Center by completing VA Form 26-1880."

My broker states he has still been successful getting the entitlement restored more than once for multiple clients. He states they've been able to purchase additional VA properties even though they have not disposed of the properties purchased with the prior VA loans. Including when COE has been used entirely during each of the first two homes as you must in Cali markets.

@Chris Mason  Have you too had any success with this or is my broker off the mark?