You don’t have a loan limit if you have full entitlement, so you don’t need to worry about calculating how much entitlement you have. You can borrow as much money as a lender is willing to lend, with no down payment. If you have reduced entitlement and want to know how much you have left, you’ll need to figure out how much entitlement you’re currently using. Remember that the VA guarantees up to 25% of your loan. To find out how much of your entitlement you’ve used, simply multiply your loan amount by 0.25. This is how the formula would look for calculating your entitlement: Loan Amount × 0.25 = Entitlement You’ve Used You’ll also need to determine your county’s conforming loan limit. In 2024, the standard VA loan limit is $766,550 for a one-unit home. In high-cost areas such as New York City or other major metro areas, the loan limit is as high as $1,149,825. It’s also higher than the standard limit for a one-unit home if you’re buying more than one unit. The maximum entitlement is equal to 25% of the conforming loan limit for your county. County Conforming Loan Limit × 0.25 = Maximum Entitlement However, if you have a reduced entitlement, you likely won’t be able to borrow up to the maximum without a down payment. You can determine your remaining entitlement by subtracting the entitlement you’ve already used from the maximum entitlement amount.VA Loan Entitlement Formula
What Is The Maximum Entitlement On A VA Loan?
Maximum Entitlement - Entitlement You’ve Used = Remaining Entitlement
Your remaining entitlement is the maximum amount the VA will guarantee on your loan. Since the VA guarantees 25% of the loan, you can multiply your remaining entitlement by 4 to see the maximum amount you can borrow without making a down payment.
Remaining Entitlement × 4 = Maximum Loan Amount With Zero Down
VA Loan Entitlement Example
Let’s say you used a VA loan to purchase your current home for $300,000 and you’ve just received permanent change of station orders. Now suppose you plan to buy a home at your new assignment but can’t sell your current home and have your VA loan entitlement restored. This means you’ll end up buying your new home with your remaining entitlement.
Step 1: Determine How Much Entitlement You’ve Used
The amount of entitlement you’ve already used is equal to 25% of the loan amount. In this scenario, you’ve already used $75,000 of your entitlement.
$300,000 × 0.25 = $75,000
Step 2: Calculate The Maximum VA Guarantee Amount
The conforming loan limit in your new location is the standard limit: $766,550. That means the maximum amount the VA will guarantee is $191,637.50.
$766,550 × 0.25 = $191,637.50
Step 3: Find Your Remaining Entitlement
To find out the amount of your remaining entitlement, you’ll need to subtract the amount you’ve already used from your county loan maximum.
$191,637.50 - $75,000 = $116,637.50
Your remaining entitlement is $116,637.50.
Step 4: Multiply Your Remaining Entitlement
To find out the total amount you can borrow with no down payment, multiply $116,637.50 by 4.
$116,637.50 × 4 = $466,550
You could potentially get a loan of up to $466,550 without having to make a down payment.
You may be able to take out a larger loan, but you’ll likely need to make a down payment to make up the difference between the amount you want to borrow and the maximum amount your entitlement covers.
If your new loan is for $500,000, the VA won’t guarantee that additional $33,450 ($500,000 - $466,550 = $33,450). Most lenders want to be guaranteed at least 25% of the loan amount, so you’ll have to make up the difference between what the VA covers and this 25% guarantee if you have reduced entitlement.
Because it’s a $500,000 house, the maximum entitlement is $125,000.
Maximum Entitlement: $500,000 × 0.25 = $125,000
Since your maximum entitlement from the VA is $116,637.50, you would likely need to make a down payment of $8,362.50.
Down Payment Amount: $125,000 - $116,637.50 = $8,362.50
How Do You Restore Your VA Home Loan Entitlement?
If you’ve previously taken out a VA loan, you can have your entitlement fully restored by paying back the loan and selling the property attached to the loan. You may also qualify for a one-time entitlement restoration if you’ve paid back your loan but haven’t sold the property attached to the loan. (You would’ve paid back your loan by reaching the end of the loan term or refinancing to a different loan type, such as a conventional mortgage loan.)
If you don’t have full entitlement and don’t qualify for a one-time restoration, you can figure out how much remaining entitlement you have by using the formulas discussed above.
Essentially, you can’t use entitlement that’s already tied up in a loan, but once your entitlement has been restored – typically by repaying your loan and selling your home – you’re free to reuse your full entitlement benefit.
