Why the Difference Matters

The distinction between your first VA loan and any subsequent VA loan mainly affects your available entitlement and VA loan funding fee first vs. second use rates. If you’re using a VA loan twice, you’ll want to know how to restore VA loan entitlement or how partial entitlement can impact your purchase. Armed with the right knowledge, you can avoid surprises and position yourself for the best financing terms possible.

Understanding VA Loan Entitlement

Your VA loan entitlement is the portion of your loan the VA guarantees. In 2025, standard loan limits may vary by county, and high-cost areas often have higher limits. First-time VA loan users typically enjoy full entitlement, meaning no down payment is required (as long as the purchase price doesn’t exceed county loan limits). Subsequent users also have access to zero-down financing, but you must verify whether your entitlement is partially tied up in an existing VA loan.

Full vs. Partial Entitlement

• Full Entitlement: Available if you have never used a VA loan or if a previous VA-backed property has been sold, refinanced out of the VA program, or the entitlement has otherwise been restored.
• Partial Entitlement: If you still own a home purchased with a VA loan or haven’t restored your entitlement after selling, you may have a reduced amount available. This can require a down payment if your next purchase exceeds the remaining entitlement.

Difference between full entitlement vs. partial entitlement

Restoring Your VA Loan Entitlement

If you plan on a second VA loan or using your VA loan multiple times, restoration is key. You can fully restore your entitlement if:

• You’ve sold the property financed with a prior VA loan and paid off that mortgage in full.
• You refinanced out of a VA loan into a non-VA loan, thereby freeing up entitlement.
• You use the VA’s one-time restoration benefit if you’ve repaid your loan in full but still own the home.

After restoration, you can enjoy the same benefits as a first-time user, including potentially lower funding fees.

VA Loan Funding Fee: First vs. Second Use

The VA loan funding fee is charged by the Department of Veterans Affairs to keep the program running and offset costs in case of default. The fee typically varies based on:

• Whether it’s your first-time or subsequent use entitlement
• Whether you make a down payment
• Your disability status

In general, first-time users pay a slightly lower funding fee than subsequent users. Veterans with a service-connected disability may be exempt from the funding fee altogether. For exact rates, be sure to consult the current VA funding fee chart at VA.gov or ask your lender.

2025 VA Funding Fee Chart: Full vs. Partial Entitlement

🛑 Exemptions: Veterans with a service-connected disability, Purple Heart recipients on active duty, and surviving spouses may be exempt from the funding fee. Check your Certificate of Eligibility (COE).

🔁 Subsequent Use Note: Once your entitlement is partially used (e.g., another active VA loan or unrecovered entitlement), the “subsequent use” rate applies, even if you’ve only had one prior VA loan.

Pros and Cons of Using the VA Loan Multiple Times

What are the benefits of using a VA loan more than once?

You can use your VA loan benefit multiple times, and the advantages remain strong:

• No Down Payment (if you have enough entitlement): You may still buy a home with 0% down if your remaining or restored VA entitlement covers the full loan amount.
• No PMI Ever: You won’t pay private mortgage insurance (PMI), even on your second or third VA loan. This helps lower your monthly payment significantly.
• Competitive Interest Rates: VA loans typically offer lower rates than conventional loans, regardless of how many times you’ve used the benefit.
• Flexible Reuse Rules: You can reuse your benefit as often as you want, as long as you restore entitlement or have enough remaining entitlement.
• Long-Term Wealth Building: Owning multiple homes over time without large down payments can help you build equity and financial security.

What are the downsides of using a VA loan multiple times?

Using the VA loan benefit again can come with added costs or limitations:

• Higher Funding Fee: The VA funding fee increases for second or subsequent uses—typically 3.3% vs. 2.15% for first-time buyers, unless you’re exempt.
• Entitlement Limitations: If part of your entitlement is still tied to a prior loan, your zero-down amount could be capped, possibly requiring a down payment.
• Strict Property Standards: VA loans require homes to meet Minimum Property Requirements (MPRs). Homes that need repairs may not qualify.
• Funding Fee Adds to Loan Balance: If you roll the fee into your mortgage, it increases your loan size and total interest paid over time.
• Not for Investment Properties: Each home must be your primary residence. You can’t use a VA loan to buy an investment or vacation property.

Step-by-Step Guide: From First to Subsequent Use

1. Obtain Your Certificate of Eligibility (COE)

Start by visiting VA.gov or working with an approved VA lender to secure your COE. This document confirms your entitlement status and how much you can borrow with no down payment.

2. Check Entitlement

For first-time VA loan users, you’ll likely have full entitlement. If this is your second VA loan or beyond, verify whether your entitlement is fully restored. If you still own a home financed with a VA loan, check the remaining amount before making an offer on a new property.

3. Get Pre-Approved

Before house hunting, get pre-approved with a VA-approved lender. This helps you understand your maximum purchase price and boosts your credibility with sellers. Your lender will factor in existing mortgages, credit score, and available entitlement.

4. Use a VA Loan Calculator

Specific interest rates and monthly payments can vary. Always plug your estimated loan amount, interest rate, and down payment (if required) into a current VA loan calculator. Doing so offers a real-time look at your potential monthly payment and total loan costs.

5. Complete the VA Appraisal and Underwriting

Once you’re under contract, the lender orders a VA appraisal to ensure the home meets VA’s minimum property requirements. After a favorable appraisal, the loan goes through underwriting, finalizing details like your funding fee, closing costs, and entitlement usage.

6. Close on Your Loan

At closing, you’ll review and sign the final documents. If you’re using restored entitlement, your contract will reflect any updated funding fee structure. Once you’ve signed and funds disburse, you officially have your new home.

Enhancing Your User Experience

While the VA loan process can seem intricate, focusing on your specific needs and questions makes it easier. Whether it’s your first vs. subsequent VA loan use, use a conversational approach with your lender, ask about partial entitlement or restoration options, and confirm you’ve optimized your funding fee scenario.

Frequently Asked Questions

What is the VA funding fee for first-time use?
The VA funding fee for first-time use with zero down is typically 2.15% of the loan amount, unless the borrower is exempt due to a service-connected disability or other qualifying reason.

Is the VA funding fee higher the second time?
Yes, the VA funding fee is usually higher on second or subsequent uses. With no down payment, it increases to 3.3% unless you qualify for an exemption.

Can the VA funding fee be waived on a second use?
Yes, if you have a service-connected disability or meet other exemption criteria, the VA funding fee can be waived even on a second or third loan use.

How can I reduce the VA funding fee on my second loan?
You can lower the VA funding fee by making a down payment of at least 5% or 10%, or by qualifying for an exemption based on disability status.

Do you have to pay the VA funding fee every time?
You must pay the VA funding fee each time you use the loan unless you’re exempt. However, it can be financed into the loan to avoid paying out of pocket.

What is the funding fee for a second VA loan with 5% down?
If you put at least 5% down on a second VA loan, the funding fee drops to 1.5% instead of the standard 3.3% for no-down-payment loans.

Does the VA funding fee apply to refinance loans?
Yes. For IRRRL (streamline) refinances, the VA funding fee is only 0.5%. Cash-out refinance loans have higher fees, similar to purchase loans.

Can I use the VA loan benefit more than twice?
Yes, there’s no limit to how many times you can use the VA loan benefit, but the funding fee applies each time unless you qualify for a waiver.

What happens if I roll the funding fee into my loan?
Rolling the VA funding fee into your loan increases your total loan balance and monthly payment, resulting in more interest paid over time.

Does VA funding fee affect my entitlement?
No, the funding fee does not reduce or affect your VA entitlement. Entitlement is separate and based on how much of your benefit is currently in use.

The Bottom Line