VA Funding..Putting the Misconception to Rest.

[Tariq B.]

Hello Fellow BP'ers,

So I am going to put out there a piece of information that I have been told over and over again by so many people, and just took their "information" for truth since I kept hearing it.

Naturally I assumed it was true, then one day after doing some random research I came across some great information that I'm sure others would find very helpful as again you have probably been told the same misconception as me. This is:

"You can only use the VA loan one time, if you want to use it again you either have to pay off the loan or refinance it to other means of funding."

This is not the case.

I am not going to break down all the ins and outs of the program of VA as it is getting late and that would take too much time. But I will give you enough to get the digging yourself.

Anyways, when it comes to the VA loan you are able to borrow up to $417,000 NO MONEY DOWN..I say that in caps because it is important. People think that, that number is the max they can borrow. That is not the case that is the amount you can borrow that you would not need to put money down. If you go over that number you would have to put some form of money down. There is a formula for this but again. Wordy.

However the most important part to this post is that you can indeed use the VA multiple times with having a VA loan outstanding. It is called 2nd tier entitlements. What this means is again we go back to that magic number $417,000. So let's say you buy your first property as an Owner occupant it cost $100,000 you live in it for a year and want to buy another property and rent out the first. You now could use the VA loan again except this time you would only be able to be money down free up to $317,000 ($417,000-$100,000). So two properties for no money down and no PMI (except for the hefty funding fee) is a pretty sweet deal. I just wanted to share this information because it has been had over and over again that you can only use it once. That is clearly not the case.

I hope this reaches the individuals that had be lead wrong just like me. ALSO I wanted to note that the $417,000 number depends on location. That number is the minimum but in other areas where there is a higher cost of living the secured loan number can be as 800k+

Happy Buying,

Tariq