Understanding Bonus Entitlement for a Second VA Loan

You can use your VA bonus entitlement to secure a second VA loan without selling your first home.

If currently have a VA home loan, you might be wondering: Can I use a VA loan a second time? The answer is yes—and it’s possible through something called VA bonus entitlement (also known as second-tier entitlement).

At Local Mortgage in Memphis, TN, we often help veterans and service members secure a second VA loan—whether they’re relocating, investing, or upsizing. Here’s what you need to know about bonus entitlement and how it can work for you.

What Is VA Bonus Entitlement?

The VA provides eligible borrowers with a basic entitlement (usually $36,000) and a bonus (or second-tier) entitlement that kicks in when you’ve already used some of your benefits but want to purchase another home.

The current full entitlement (as of 2025) is based on the conforming loan limit, which in Shelby County and most of the Memphis metro area is $766,550. That means your full VA loan benefit is 25% of that amount, or $191,637.50.

If part of your entitlement is still tied up in your current home, you may still have remaining entitlement to use on a second home—without selling your first.

When You Might Use Bonus Entitlement

Here are some common situations where Memphis veterans use bonus entitlement:

• You received PCS (Permanent Change of Station) orders and want to keep your current home as a rental.

• You’ve outgrown your existing house and want to upgrade to a larger home in the Memphis suburbs.

• You previously bought a home using a VA loan, but didn’t restore your entitlement.

How Much Can I Borrow Using Bonus Entitlement?

The VA doesn’t set a cap on how much you can borrow—but it does limit how much it will guarantee. If your entitlement doesn’t cover 25% of the new loan, you’ll likely need a down payment to make up the difference.

Example:

Let’s say your first VA loan used $100,000 of entitlement. If your full entitlement is $191,637.50, you still have $91,637.50 remaining. That means you could borrow up to 4 times that amount—around $366,550—with no down payment on your second VA loan.

If your new home costs more than that, you may need to put down the difference to meet the 25% guaranty rule.

Key Requirements for a Second VA Loan

Using bonus entitlement is absolutely possible, but it comes with a few important conditions:

1. Occupancy Requirement: You must intend to live in the new home as your primary residence.

2. Remaining Entitlement: You need to have enough entitlement left or be willing to make a down payment.

3. Credit & Income Qualifications: You still need to meet VA loan guidelines for credit score, DTI, and income.

4. Funding Fee: If you’re not exempt, the VA funding fee may be higher for subsequent use (up to 3.3%).

How to Restore VA Entitlement

In some cases, it may make more sense to restore your full entitlement by:

• Selling your original home and paying off the VA loan

• Applying for a one-time restoration if the loan has been paid in full but you still own the property

  
  

Our team at Local Mortgage can walk you through which option fits best with your long-term goals.

Why Work with a Local Memphis VA Loan Expert?

The Memphis market offers everything from urban condos in Midtown to spacious homes in Arlington or Lakeland. That’s why having a local mortgage advisor who understands VA loans and the Memphis area is crucial.

At Local Mortgage, we’ve helped countless veterans secure second VA loans using bonus entitlement—without selling their first home. Whether you're moving across town or relocating after deployment, we’re here to make it easy.

Final Thoughts

Bonus entitlement allows you to use your VA loan benefit more than once—even if you haven’t sold your previous home. It’s a powerful advantage for military families looking to build wealth through real estate.

If you're a veteran and considering a second VA loan, contact Local Mortgage to find out how much of your entitlement you can still use.

How I Can Help You

When it comes time to purchase a home or refinance an existing loan, I want to help you! Hopefully articles like this give you good information and a better understanding of the mortgage world but let me use my experience and expertise to help you with your particular situation.

I tell my clients and referral partners that a mortgage transaction starts with a simple conversation. Let’s talk about your financial situation, budget, and goals so that I can help you determine the best solution for you. During a 10-minute informal conversation, we can get you on the right path as it relates to a home purchase or mortgage refinance.