@Anonymous wrote:
Does anyone have information on using their VA bonus entitlement? Long story short, the basic entitlement was used on a home before the big market crash of 2008. The home ended in a deed-in-lieu in 2013. The veteran does not owe the VA but the basic entitlement has not been restored due to their full $50,564 basic entitlement being used on that prior mortgage.
The VA provided the COE and stated that the veteran has enough bonus entitlement to guaranty the home he is looking to purchase as his primary residence. They also stated that the basic enetitlement does NOT need to be restored in order to utilize the bonus entitlement.
The veterans credit score and DTI is not an issue. He is also exempt from the funding fee as he is over 10% disabled (The funding fee was paid on the prior mortgage due to him being active military at the time).
Hi @Anonymous,
A lot of this depends on what the loan limit is for the county the Veteran wants to buy in.
For the sake of this example I'm going to use the standard loan limit for most areas which is $510,400.00.
At $510,400, the Veteran's standard entitlement is $510,400 X 25% = $127,600.
Now subtract what's already used to determine the remaining entitlement available.
$127,600 - $50,564 = $77,036. Now multiply by 4 to get the max loan amount without a down payment. $77,036 X 4 = $308,144.
If the Veteran wants to go over that amount they would have to put 25% of the difference.
For example: Let's say the Veteran finds a place for $358,000. Take the difference and multiply by 25%.
$358,000 - $308,144 = $49,856 X 25% = $12,464.00.
One caveat with 2nd tier entitlement: The loan amount has to exceed $144,000.00.
Does that make sense?
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