Thank you for your service.
Technically you can but it would be a 1st and 2nd mortgage combo with the VA loan in 1st position.
The main issues you're likely to run into are as follows.
1) Finding a lender that understands the VA 2nd tier or bonus entitlement. I do and you can find more info on it by clicking the link below.
2) Finding a lender to do a 2nd mortgage that will allow you to count the rental income form your current home to help offset that mortgage to help with qualifying for the new mortgage. There are even VA lenders that will not allow this on the VA mortgage but I do.
3) A lender that will do a 2nd mortgage to 100% of the homes appraised value.
To buy a new home at $425,000 using your remaining entitlement under the VA 2nd tier you would need a down payment of $54,756.25 so you wouldn't need a 2nd mortgage of $200,000.
Check out my recommendations here on Trulia from some of my past clients by clicking the following link. http://www.trulia.com/profile/johnburke/#__rec
Please feel free to contact me for more information or help. You can also find info on my VA Mortgage website by clicking the link below.
Senior Mortgage Banker
Great Plains National Bank