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Second-Tier VA Loan: What It Is and Who Qualifies

A Black veteran sits in his home with his wife and daughter

For active-duty military and veterans, second-tier VA loans may be able to fund and finance the dream of homeownership. The U.S. Department of Veterans Affairs works with top mortgage lenders such as New American Funding (NAF) to allow veterans to access funds. For many, VA home loans may be able to offer a helping hand while mapping out the road to the American Dream.

How Do VA Loans Work?

VA loan programs include specific types of loans provided by the . The programs assist eligible veterans as they navigate various housing hurdles. The VA has government-backed programs that address different stages of the homeownership process such as buying, building, and refinancing current loans. You may be able to receive a VA-backed loan from an approved mortgage lender such as NAF. If you meet the requirements, you may be able to qualify for VA loan entitlement.

VA loan entitlement examines if a veteran meets the requirements to access home loan assistance. The entitlement notes the amount an individual veteran may be able to receive as a guarantee for a loan.

How Many VA Loans Can You Have at the Same Time?

Depending on the situation, you may be able to have multiple VA loans at the same time. It’s possible to use the last of your remaining entitlement from your first VA loan to take out a second VA loan. The VA does not limit the total number of loans that you may receive throughout your life. Lenders such as New American Funding provide a wide selection of VA-backed loans ranging from a VA Purchase loan to a .

Veterans with full entitlement typically do not have loan limits. However, remaining entitlement is often subject to county loan limits. The VA does not require insurance such as mortgage insurance. Review VA home loan limits and speak with us to understand the opportunities available to you.

What Is a VA Loan Entitlement?

Entitlement is the amount the VA guarantees on a veteran’s loan. Veterans with full entitlement do not have exact loan limits. Entitlement might ensure that the VA covers a veteran’s down payment and 25% of the loan if the veteran defaults. Keep in mind entitlement has two layers.

The first layer allows a veteran to take out a loan to help fund a primary residence. A second-tier or second-layer VA loan indicates that a veteran likely has two loans. Second-tier entitlement may occur after a veteran previously purchased a home. In certain situations, a portion of the entitlement may be linked  to a mortgage. It’s possible to restore entitlement by fully repaying a loan.

If you qualify for a VA loan, you’ll receive a Certificate of Eligibility (COE), proving to lenders such as New American Funding that you have achieved both entitlement and eligibility.

Eligibility Requirements for a Second-Tier VA Mortgage

Eligibility requirements for a second-tier VA mortgage typically include minimum service requirements. The requirements surrounding a second-tier VA mortgage come into play once a veteran has made a first purchase using a VA loan.

Minimum Active Service Duty

The minimum active service duty requirements depend on when you serve. For example, the minimum active-duty service criteria for service members differs between WWII and the present day. You may qualify if you have served for at least 90 days in a row. Stipulations may vary between wartime and peacetime service.

Obtain a Certificate of Eligibility (COE)

A COE proves that you are eligible to obtain a second-tier VA mortgage. It is a necessary step when attempting to work with qualified lenders. You may need additional documents to receive your COE.

Keep in mind that you may be able to get a COE for hardship or a medical condition.


Your debt-to-income ratio will determine your loan eligibility. The VA recommends a ratio of 41%. A debt-to-income ratio explains how much of your monthly income goes to pay off your debt. The VA does not have a maximum income limit for receiving VA benefits.


The VA does not have a standard minimum credit score. The VA takes into account various components of your entire loan. Improved credit may offer you access to better terms and rates.

Meet Lender’s Requirements to Receive a VA-backed Home Loan

Lenders have their own eligibility requirements. Reach out to your Loan Officer, to learn more about credit score or income expectations. Lenders often provide specific

How to Calculate Second-Tier Entitlement Amounts

When calculating a second-tier entitlement, it’s important to know the total amount of your loan. Secondary entitlement may differ depending on your remaining entitlement and county loan limits. The VA typically guarantees a portion of your loan. As a result of the guarantee, second-tier entitlement amounts as 25% of your total loan amount. You may only borrow the amount that you are qualified to receive and you can get an estimate for how much different types cost using our calculators.

3 Possible Second-Tier VA Entitlement Situations

You may be able to use a second-tier VA entitlement during different situations. For example, it may be possible to access your entitlement when keeping your house and making a new purchase, buying again after a VA mortgage default or exploring VA loan assumptions. Speak with your Loan Officer at NAF to know the options available to you.

Keeping Your House and Making a New Purchase

In some situations, you may be able to keep your house while you make a new purchase. This benefit allows you to maintain your current property while gaining ownership of a second property. You may be able to use the second property as your primary residence and make the first property into a rental. Restoring your entitlement may be able to help you fund an investment property or second home.

Buying Again After VA Mortgage Default

It’s usually possible to buy again after a VA mortgage default. A veteran must likely wait around two years after a default or foreclosure to become eligible. Having defaulted may not stop you from qualification.

To avoid defaulting, speak to your Loan Officer or contact the VA for financial counseling. It’s best to reach out when a veteran experiences difficulty making payments.

VA Home Loan Assumptions

As a VA loan holder, you have certain built-in rights. It’s possible to sell your home to an approved buyer who agrees to assume your loan. The buyer must meet certain credit expectations and agree to take on your liability to the lender and the VA.

Using Second-Tier VA Loan Entitlement Following Foreclosure or Bankruptcy

A veteran may be able to use a second-tier VA loan entitlement after a foreclosure or bankruptcy. If a veteran previously used some of their eligibility, then the lender will likely need to calculate the amount of eligibility tied to the property. A veteran may get a second-tier VA loan if they rebuild their credit and meet the minimum waiting period requirement.

Achieve More with a Second-Tier VA Loan

A second-tier VA loan can offer you the resources necessary to obtain funding. The VA works with approved lenders and may be able to support you in your building or buying endeavors. With the right team, you may be able to harness your eligibility and make it work for you as you step into future homeownership.

Frequently Asked Questions

How do You Determine Your Remaining Entitlement?

Determining your remaining entitlement depends on the maximum amount of entitlement available and the amount currently used. Speak with your Loan Officer to better understand your situation.

How Long do You Have to Wait to Use Your VA Loan Again?

VA loan benefits are lifetime benefits. Once a loan is paid , full entitlement may be restored. 

Can a Second Person Be on a VA loan?

Yes, it’s possible to have a second person on a VA loan. For example, a joint VA loan may include non-veterans like non-veteran spouses. 

How low will your payment be?