VA Loan Entitlement Explained

Understanding VA loan entitlement is your key to homeownership success. Learn about VA basic and bonus entitlement, loan limits, entitlement codes, eligibility requirements, and more.
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After reunited with her family, a female soldier enjoys spending time with them.

VA entitlement refers to the dollar amount the Department of Veterans Affairs (VA) guarantees on a VA loan. It represents the portion of the loan that the VA will repay to the lender if the borrower defaults. Eligible borrowers receive entitlement codes printed on their Certificate of Eligibility, a VA document that lenders use to confirm a borrower’s VA loan eligibility and remaining entitlement.

VA Loan Basic Entitlement

Basic entitlement on a VA home loan is $36,000. This line on your COE is primarily for your lender, showing that you have your full VA entitlement.

This doesn’t mean that $36,000 is the total amount you can borrow. It means that the VA guarantees lenders that they will pay up to $36,000 if a borrower defaults on a loan under $144,000, or 25% of the loan amount.

Because borrowers need more than $144,000 to purchase a decent-sized home in most parts of the country, the VA provides bonus entitlement.

VA Loan Bonus Entitlement

The VA offers bonus entitlement to borrowers seeking to buy a home above $144,000. For borrowers with full entitlement, the VA will guarantee up to 25% of the conforming loan limit in your county. The loan limit in most counties is $726,200, in which case the VA will guarantee $181,550 of the loan– a combination of both bonus and basic entitlement.

If you have reduced entitlement, the VA will only guarantee up to 25% of your county’s conforming loan limit minus the amount of entitlement you have already used. Borrowers looking to buy above their county’s conforming loan limit can still qualify for VA loans, but they will typically need to make a down payment to cover the difference.

Max VA Loan Amount

Although there are VA loan limits, it’s important to understand that this does not necessarily impose a strict cap on the maximum amount you can borrow through a VA loan. In 2020, the VA eliminated loan limits for service members, veterans and surviving spouses who still have their full loan entitlement available.

This means that if you’ve never taken out a VA loan, repaid your VA loan in full or sold the home you purchased with it, you can borrow as much as a lender is willing to qualify you for without a down payment.

VA Entitlement Codes

VA entitlement codes are a system used by the U.S. Department of Veterans Affairs to determine a veteran’s eligibility for certain VA benefits and services. These codes are based on a veteran’s length of service, discharge status, and other factors and can determine the level of benefits a veteran is eligible to receive.

Let’s take a look at what each code means and the amount of service required to unlock your VA home loan benefit.

VA Entitlement Codes and Service Requirements

Entitlement Code 01

Veterans who served during World War II (September 16, 1940, through July 25, 1947) are designated by entitlement code 01. To be eligible for a VA home loan, the minimum service requirement for this period is 90 days.

Entitlement Code 02

Veterans who served during the Korean War era (June 27, 1950, through January 31, 1955) are designated by entitlement code 02. To be eligible for a VA home loan, the minimum service requirement for this period is 181 days of active duty.

Entitlement Code 03

Veterans who served during the post-Korean War era (February 1, 1955, through August 4, 1964) are designated by entitlement code 03. To be eligible for a VA home loan, the minimum service requirement for this period is 90 days.

Entitlement Code 04

Veterans who served during the Vietnam War era (August 5, 1964, through May 7, 1975) are designated by entitlement code 04. To be eligible for a VA home loan, the minimum service requirement for this period is 90 days.

Entitlement Code 05

Entitlement code 05 stands for “entitlement restored.” This entitlement code is for those who have previously taken out a VA loan and paid it off. Having your full entitlement available means the VA will guarantee your loan to the complete 25%. It also means that you don’t have to put a down payment on your new loan.

Note that there is no limit to how many times you can take out a VA loan.

Entitlement Code 06

Entitlement code 06 applies to surviving spouses.

Generally, to be a surviving spouse that is eligible for the VA home loan benefit, you must not have remarried, and your spouse must have died during service or due to a service-related injury.

Entitlement Code 07

Entitlement code 07 applies to surviving spouses whose spouse is a veteran who is missing in action or designated a prisoner of war (POW). As in the case of entitlement code 6, the surviving spouse must not have remarried.

Entitlement Code 08

Entitlement code 08 is for veterans who served post-World War II during peacetime (July 26, 1947 through June 26, 1950). The minimum service qualification is 181 days of duty.

Entitlement Code 09

Entitlement code 09 is for military members who served from May 8, 1975, through September 7, 1980. The minimum service qualification is 181 days of duty.

Entitlement Code 10

Military members who have served after August 2, 1990, fall under entitlement code 10. Under entitlement code 10, the minimum service qualification is 90 days of active duty.

Entitlement Code 11

Entitlement code 11 confirms eligibility for National Guard and Reserve members. To be a VA loan-eligible National Guard or Reserve member, you must have served at least 6 years in Selected Reserves or qualify due to activation under special Title orders.

Specifically, under Title 10, National Guardsmen and Reservists are eligible for a VA loan if they’ve served at least 90 consecutive days on active duty.

Under Title 32, National Guard or Reserve members must have served at least 90 days on active duty, 30 of which must have been consecutive.

VA Restoration of Entitlement

VA restoration of entitlement is a process where veterans who have previously used their VA home loan benefit have their entitlement restored to use the benefit again. When veterans use their VA loan benefits to obtain a mortgage, their entitlement is reduced by the loan amount.

Common methods of restoring entitlement include:

  • Paying off the loan
  • Selling the home
  • Having someone else assume the loan
  • Refinancing the VA loan into another loan type

Veterans interested in restoring their entitlement should contact the VA or a VA-approved lender for more information.

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