VA Restoration of Entitlement

By Bill Lyons | Updated on February 2, 2024

VA entitlement is a benefit veterans are eligible for that allows them to get qualify for a VA loan. Entitlement is available to veterans who meet certain requirements, which include at least 90 days of active-duty service. In the event that you default on a VA loan, you typically lose your VA entitlement.

Have you recently lost your VA entitlement? Do you have questions about qualifying for a VA loan or the average down payment for VA loans? We’re here to help. Keep reading to learn more about VA entitlement restoration and how to restore VA entitlement so that you can get the most out of your home loan.

What Is VA Entitlement?

VA entitlement is one of the benefits military veterans are eligible for after they’ve fulfilled basic service requirements. Once you qualify for VA entitlement, the VA will agree to repay a certain portion of your VA loan if you default on that loan. In order to qualify for VA entitlement, you typically need 90 days of active-duty service in any branch of the military. Veterans and, in some cases, surviving spouses, can also be eligible for VA loans.

In simple terms, your VA entitlement is how much money the VA will guarantee when you take out a VA loan. Those who have never taken out a VA loan or have repaid their VA loan and sold the property they bought it with typically have full entitlement. With full entitlement, you don’t have to make a down payment on your VA loan and the VA guarantees up to 25% of the loan amount, regardless of how much you borrow.

Those with partial entitlement, on the other hand, may have to put money down if the loan amount exceeds their entitlement. However, you can always restore your full VA entitlement and use the VA loan as many times as you’d like, provided you meet certain requirements.

Obstacles to Getting Your VA Entitlement Restored

There are a few things that can stand in the way of you getting your full VA entitlement restored. Some of these obstacles include:

• You haven’t paid off a VA loan: If you’ve previously taken out a VA loan, that mortgage must be completely paid off in order to restore your full entitlement. You may still have partial entitlement.
• You haven’t sold the property you bought with a VA loan: In addition to paying off your current VA loan, you must also sell the property you purchased it with in order to restore your entitlement. Note that VA loans are intended for primary residences only, and not investment, rental, or vacation properties.
• The VA hasn’t been informed about the sale of your property: Even if you sell the home you purchased with your previous VA loan, you must inform the VA so that they have a record of the property being sold.
• You defaulted on your last VA loan: If you default on a VA loan, this can impact your entitlement and eligibility. You must eventually repay this amount if you want to restore your VA entitlement.

How to Restore Your VA Entitlement

You have a few different options when it comes to restoring VA entitlement, so it’s smart to assess your situation to figure out which option is best for you. Paying off your loan is the quickest and easiest way to restore your VA entitlement so you can take out another loan, but you can learn more about some of your other options below.

Sell your home and pay off your loan

The simplest way to restore your VA entitlement is to sell your home and pay off your existing VA loan. You can also pay off the VA loan attached to the property and use your VA entitlement to buy a new primary residence. In this way, you can live in the new home while using the former home as a vacation or investment property.

Allow a qualifying veteran to assume your VA loan

Having a qualified veteran assume your VA loan is another option. If you can’t sell your home for the full amount you need to repay your loan, you can find a qualified veteran who can assume your loan and allow you to restore your VA entitlement. The requirements for assuming a VA loan may vary slightly from general VA loan requirements, but anyone who’s eligible for a VA loan should have no trouble assuming your loan if they want to.

Restore VA entitlement through refinancing

If you can’t sell your property to repay your loan and you can’t find a qualifying veteran to assume your loan, you can restore your entitlement by refinancing. Refinancing your VA loan can allow you to pay off your existing loan while adjusting your interest rate. Borrowers can use a VA cash-out refinance loan to convert their home equity into cash or a VA streamline refinance loan (IRRRL) to lower their monthly mortgage payment.

Apply for the one-time restoration of entitlement

You can restore your VA entitlement by applying for the one-time restoration of entitlement that the VA offers. This is a benefit that allows you to restore your entitlement, but you can only use it one time. You may qualify for a one-time restoration of entitlement if you’ve repaid your VA loan but haven’t sold your home. This is a significant benefit, as it allows qualifying borrowers to keep the first home they purchased and use the VA loan on a new property as well.

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How Many Times Can You Restore Entitlement?

Practically speaking, you can restore entitlement and use a VA loan multiple times as long as you continue to meet the requirements for VA entitlement restoration. As long as you’re able to repay your loan without having to convert it to a non-VA loan, you can typically keep applying for restoration of entitlement.

While using a VA loan multiple times is possible, you should also remember that there are specific requirements you have to meet. If you choose to restore your entitlement using the one-time restoration of entitlement, you’ll only be able to do so once—moving forward, you’ll have to sell off all properties associated with your VA loan if you want to restore your entitlement.

How Long Does It Take to Restore VA Entitlement?

Restoring VA entitlement can be a lengthy process if you need to find someone to assume a loan or sell your home to repay a loan. Once your loan is paid off, you’ll need to fill out an application and submit it to the VA.

So how long does it take to restore VA loan entitlement? Depending on who you work with, it can take anywhere from a few days to a few weeks after all requirements have been met to get your VA entitlement restored. Working with a qualified VA lender like Griffin Funding is the best way to make sure your entitlement is restored as quickly as possible.

Apply for VA Entitlement Restoration Today

Restoring VA entitlement is essential if you’re planning on taking out a loan to purchase property in the near future. Unfortunately, it can be tough to get all your finances worked out so you can restore your entitlement. The first step is figuring out how you’re going to repay your loan or who’s going to assume it.

The experts at Griffin Funding have dealt with VA loans for a long time, so we know them inside and out. As a leading VA lender, we can help you restore your entitlement so you can qualify for a VA loan. Contact Griffin Funding to get help with your VA entitlement restoration today and take advantage of competitive VA loan rates.

Bill Lyons

Bill Lyons is the Founder, CEO & President of Griffin Funding. Founded in 2013, Griffin Funding is a national boutique mortgage lender focusing on delivering 5-star service to its clients. Mr. Lyons has 22 years of experience in the mortgage business. Lyons is seen as an industry leader and expert in real estate finance. Lyons has been featured in Forbes, Inc., Wall Street Journal, HousingWire, and more. As a member of the Mortgage Bankers Association, Lyons is able to keep up with important changes in the industry to deliver the most value to Griffin's clients. Under Lyons' leadership, Griffin Funding has made the Inc. 5000 fastest-growing companies list five times in its 10 years in business.