14,512 views

Tacoma's #1 Mortgage Expert

By Kevin Tinsley | Mortgage Broker
or Lender in Tacoma, WA

How to Calculate VA Guaranty Entitlement - VA Loans

VA Guaranty Calculation Examples

The following examples illustrate some common situations involving VA-guaranteed loans. They are by no means comprehensive. Due to variations in the amount of entitlement available to an individual veteran, loan limits for individual counties, and purchase prices for homes, situations may arise which are not covered here. Lenders are encouraged to contact the appropriate VA Regional Loan Center prior to closing a loan if there are questions about the VA guaranty calculation.

Example 1

Veteran has full entitlement available and is purchasing a home for \$300,000 where the county loan limit is \$417,000.

\$417,000 X 25% = \$104,250 Maximum Guaranty and Available Entitlement

\$300,000 X 25% = \$75,000 Guaranty and Down Payment Combination Required

Since VA's guaranty is limited to the lesser of 25% of the county loan limit or 25% of the loan amount, VA will guaranty \$75,000 on Veteran's \$300,000 loan in this county. A down payment should not be required.

Example 2

Veteran has used \$48,000 of entitlement on a prior loan, which may not be restored, and is purchasing a home for \$320,000 where the county loan limit is \$625,000.

\$625,000 X 25% = \$156,250 Maximum Guaranty

\$156,250 - \$48,000 = \$108,250 Entitlement Available

\$108,250 X 4 = \$433,000 Maximum Loan Amount with 25% Guaranty

Since the proposed loan amount will be less than \$433,000, the lender will receive 25% VA Guaranty on the loan of \$320,000. A down payment should not be required.

Example 3

Veteran has used \$104,250 of entitlement on a prior loan, which may not be restored, and is purchasing a home for \$380,000 where the county loan limit is \$815,000.

\$815,000 X 25% = \$203,750 Maximum Guaranty

\$203,750 - \$104,250 = \$99,500 Entitlement Available

\$99,500 X 4 = \$398,000 Maximum Loan Amount with 25% Guaranty

Since the proposed loan amount will be less than \$398,000, the lender will receive 25% VA Guaranty on the loan of \$380,000. A down payment should not be required.

Example 4

Veteran has full entitlement available and is purchasing a home for \$480,000 where the county loan limit is \$417,000.

\$417,000 X 25% = \$104,250 Maximum Guaranty and Entitlement Available

\$104,250 / \$480,000 = 21.72% Guaranty

Since VA's Guaranty will be less than 25%, a down payment will likely be required to meet investor requirements.

\$480,000 X 25% = \$120,000

\$120,000 - \$104,250 = \$15,750 Down Payment

Example 5

Veteran has used \$27,500 of entitlement on a prior loan, which may not be restored, and is purchasing a home for \$320,000 where the county loan limit is \$417,000.

\$417,000 X 25% = \$104,250 Maximum Guaranty

\$104,250 - \$27,500 = \$76,750 Entitlement Available

\$76,750 / \$320,000 = 23.98% Guaranty

\$76,750 X 4 = \$307,000 Maximum Loan Amount with 25% Guaranty

Since VA's Guaranty will be less than 25%, a down payment will likely be required to meet investor requirements.

\$320,000 X 25% = \$80,000

\$80,000 - \$76,750 = \$3,250 Down Payment

Example 6

Veteran has used \$36,000 of entitlement on a prior loan, which may not be restored, and is purchasing a home for \$120,000 where the county loan limit is \$417,000.

Since the loan amount will not be over \$144,000, the veteran's additional entitlement cannot be used. Therefore, the guaranty would be 0%: \$0 / \$120,000

Example 7

Veteran has full entitlement available and is purchasing a home for \$800,000 where the county loan limit is \$729,750.

\$729,750 X 25% = \$182,437.50 Maximum Guaranty and Entitlement Available

\$182,437.50 / \$800,000 = 22.81% Guaranty

\$800,000 X 25% = \$200,000 Guaranty and Down Payment Combination Required

\$200,000 - \$182,437.50 = \$17,562.50 Down Payment

All Tech Mortgage Inc. is your gateway to great mortgage products from Washington State's top mortgage lenders. Locally based in Tacoma, we shop, compare rates & fees and connect you with the best mortgage lenders in the Northwest. The interest rates we quote are typically .25% - .50% lower than most national mortgage companies. Plus our fees are some of the lowest in the industry.

We Specialize in No Cost and Low Closing Cost Purchase & Refinance Home Loans.  All Tech Mortgage offers true wholesale pricing from our lending partners.  At All Tech Mortgage, we never expect your business, but hope to earn it with our aggressive pricing, speed, and overall efficiency.

visit us online at www.VALoansTacoma.com