VA loan - entitlement question

[Kelly McMahon]

Hi everyone,

My husband and I bought our first home with a VA loan which was very nice not to have a down payment. We are looking into buying a second bigger home and renting out the first. Does anyone know any stipulations to this? My realtor said the first step is to see how much entitlement we have left with the VA but we have no idea what this even means! I looked up some info on the VA website but it was very confusing. Can someone explain what this means?

Does anyone know if a) we can rent out a home under a VA loan. b) can we buy a second home with a VA loan c) do we have to refinance the rental to an FHA or other loan type or buy the next house with a FHA or other loan or d) are there tax issues of renting out a VA loan home?

Thank you!

[Bill Gulley]

If you have been in the home over a year you can rent it without refinancing.

The VA entitlement is the amount that can be guaranteed by VA, soory but I don't know what your entitlement might be as amounts are different depending on service history. You need to contact the VA and ask for a determination letter for your VA loan entitlement.

Let's say it's 250K, if your existing home is 100K and you are buying a home less than 150K, you still have the ability to obtain another VA loan. The limitation to the guarantee is based on your entitlement amount, not the number of loans.

Lenders will consider the number of loans, amounts and debts for you to qualify. You still must qualify for a loan, the entitlement does not mean you are entitled to a loan, but only to the amount that may be guaranteed if you qualify. Good luck :)