VA Entitlement Explained: How to Calculate Your Remaining Benefits

Understanding your VA home loan entitlement is the first step to determining your purchasing power and whether you'll need a down payment. Your VA entitlement is the amount the Department of Veterans Affairs guarantees on your loan, which directly impacts your ability to buy a home with zero down. This guide explains the difference between full and remaining entitlement, how to calculate what you have left, and the steps to restore your benefits if needed.

What Is VA Entitlement?

VA entitlement is a cornerstone of the VA home loan program. It represents the maximum amount the Department of Veterans Affairs will repay your lender if you default on the mortgage. This guarantee eliminates the need for private mortgage insurance (PMI) and often allows for a 0% down payment. There are two primary categories: full entitlement and remaining entitlement. Your status affects your loan limits and down payment requirements.

What Is the Difference Between Full and Remaining Entitlement?

The key distinction lies in your prior use of the VA loan benefit.

Full Entitlement You likely have full entitlement if you meet one of these criteria:

• You have never used your VA home loan benefit.
• You have paid off a previous VA loan and sold the property.
• You have experienced a foreclosure or short sale but have fully repaid the debt to the VA.

Borrowers with full entitlement face no VA-mandated loan limits. However, individual lenders will still base their maximum loan amount on your financial profile and may adhere to local conforming loan limits—the maximum loan size Fannie Mae and Freddie Mac will purchase. You can check these limits for any U.S. county on the Federal Housing Finance Agency (FHFA) website. Even if a loan exceeds the conforming limit, the VA will still guarantee 25% of it, but you must find a lender willing to approve the larger amount.

Remaining Entitlement You have remaining entitlement if you have an active VA loan or have used your benefit but still own the property connected to it. Common scenarios include:

• You are currently repaying a VA loan.
• You paid off a VA loan but still own the home.
• You refinanced a VA loan into a non-VA loan and retained the property.
• You had a foreclosure or short sale and did not repay the VA in full.

For these borrowers, the VA imposes a loan limit based on the local conforming loan limit. Your remaining entitlement is calculated as 25% of the conforming loan limit, minus the amount of entitlement you've already used. This often results in a required down payment to cover the gap between your remaining entitlement and the full 25% guarantee lenders typically seek.

How Do I Calculate My Remaining VA Entitlement?

If you have full entitlement, no calculation is necessary. For those with remaining entitlement, follow these steps:

1. Determine Your Used Entitlement: Multiply the original loan amount of your current VA-backed loan by 0.25 (25%).

   • Formula: Loan Amount × 0.25 = Entitlement You’ve Used
   • Example: If you have an existing VA loan for $300,000, your used entitlement is $300,000 × 0.25 = $75,000.

2. Find Your County's Conforming Loan Limit (CLL): Check the current year's limit on the FHFA website.

3. Calculate Your Remaining Entitlement: Take 25% of your county's CLL and subtract your used entitlement.

   • Formula: (CLL × 0.25) - Used Entitlement = Remaining Entitlement
   • Example: If your county's CLL is $726,200, the basic entitlement is $181,550. Subtracting your used $75,000 leaves you with $106,550 in remaining entitlement.

This remaining entitlement amount is the VA's guarantee on your next loan. If the loan amount requires a larger guarantee, you may need to make a down payment.

How Can I Restore My VA Entitlement?

Your entitlement is not necessarily gone forever. You can fully restore your VA entitlement by meeting one of two conditions:

• Pay off the VA loan and sell the property. This is the most straightforward path to full restoration.
• Apply for a one-time restoration. You may be eligible for this if you have paid off the VA loan but still own the home, such as after refinancing into a conventional mortgage. This option is typically available only once.

To verify your exact entitlement status, you must obtain your Certificate of Eligibility (COE). You can view this instantly by signing into your account on the VA’s official website under the "Home Loans" section. You can also request it by mail using VA Form 26-1880 or by calling the VA at 1-877-827-3702. Based on our experience assessment, consulting with a knowledgeable VA lender is the most efficient way to interpret your COE and understand your specific buying power.

In summary, the most critical steps are to obtain your COE and understand your entitlement status. Borrowers with full entitlement have significant flexibility, while those with remaining entitlement should calculate their benefits carefully and be prepared for a potential down payment to secure their next home.