How to Restore Your VA Eligibility

how to restore VA eligibilityMany Veterans don’t realize that it is possible to restore VA eligibility for a home loan. The VA home loan is not just for first time home buyers and is not a one time use program. However, there are guidelines that effect a Veterans ability to have more than one VA loan at a time. It is important that once a previous VA home loan has been paid off that the Veteran notify VA of the disposition of the loan. Once VA has proof of the pay off of the loan then the Veterans Entitlement can be restored. There are a few different possibilities when it comes time to restore your VA eligibility.

 Use the VA Form 26-1880 to Restore VA Eligibility

  • If you bought a home with a VA home loan previously and then sold the home you will need to complete the VA Form 26-1880 (you will complete the form in any situation). You will also need to send in a copy of the certified closing statement for the sale of the home. Once VA verifies the loan has been paid off satisfactorily then the Entitlement and VA eligibility should be restored back to 100%.
  • If you bought a home with VA financing previously and later paid off the VA loan but still own the home, then you may apply for a One Time Only Restoration of Entitlement to purchase another home. Proof of the loan being paid off needs to be verified by VA, and of course the complete VA Form 26-1880 needs to be completed.
  • If you bought a home previously with VA financing and later sold the home, with the buyer assuming your VA loan, then you may use the 1880 form to check as to whether you have at least a partial Entitlement remaining. Until the assumed VA loan is paid off you will not have 100% Entitlement. However, depending on the new purchase price you may still be able to buy a home with VA financing with $0 down with a partial Entitlement.

Retrieve Your Certificate of Eligibility Before you Make an Offer on a Home

It is very important that you retrieve your Certificate of Eligibility before making an offer on a home. The VA Form 26-1880, also known as the Request for Certificate of Eligibility, just needs to be submitted to VA. For California Veterans, the fastest and easiest way to do this is through a California VA approved lender, who can quickly access the Certificate of Eligibility through the VA portal. A direct California VA lender should be able to access the Certificate of Eligibility within minutes in many cases. If there is information that VA needs to verify it could take a few days, but is still quicker than having the Veteran mail the 1880 form in.

Authored by Tim Storm, a California VA Loan Officer specializing in VA Loans. MLO 223456. – Please contact my office at the Home Point Financial. My direct line is 949-640-3102. I will prepare custom VA loan scenarios which will be matched up to your financial goals, both long and short term. I also prepare a Video Explanation of the your scenarios so that you are able to fully understand the numbers BEFORE you have started the loan process.