In about 1984 I had a VA loan but lost that house to bank auction due to layoff from work. The new buyer paid to the bank an amount roughly equal to my outstanding mortgage less an amount approximately equal to my VA Entitlement. I believe that means that I lost my VA Entitlement.
But I am under the impression that I might now be eligible for a "secondary" VA Entitlement. Is that true? And if so, how should proceed to in order to get a new VA loan. Or do I need a new entitlement to secure a new VA loan?
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Hello Richard,
Thanks for coming by my site. Also, I thank you for sharing with me enough details that I can make an intelligent answer rather than guessing what you mean.
I'm afraid that I do not have the best news for you. If the house that was foreclosed on was paid off in full so that none of your VA entitlement was used then you would be able to have it restored. You indicate that the VA paid the lender the amount equal to your entitlement.
If that is indeed the case, until you repay the full amount of the entitlement paid to the lender, you will not be able to get a "secondary" one.
The "secondary" entitlement you may be referring to is what is available to Veterans that buy homes that are up to the Freddie Mac loan limit. For a single unit home that amounts to $417,000. So the Veteran could qualify up to 25% of that amount which is $104,250. The standard amount is $36,000.
So what this means if you were able to receive your entitlement assuming there was no foreclosure, then yes you could purchase a home and use your benefits once again.
I'm inserting a link to the VA website directly go to their Q&A section that will give you additional information. Just click here to see it.
Hopefully you find this helpful although I'm sure it is not what you want to hear. I'm sorry to hear that you had fallen on bad times in the past. I 'm happy you have recovered and are in the market once again.
I suggest you take a look at the FHA 203b home loan. If your foreclosure was over 3 years ago (which certainly appears to be the case) then you may be able to get an FHA home loan.
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