VA Loan Articles
Why Can't I Get My VA Loan Eligibility Restored?Some veterans who take advantage of their VA loan benefit don't think about using it again, but there are several circumstances where a borrower can get their VA home loan eligibility restored. This restoration allows the borrower to apply for a new VA mortgage and reap the same benefits as they did the first time.
This is normally the case when the borrower has sold the property and completely paid off their VA home loan; the VA also has a one-time only restoration option for those who have paid in full but still own the property.
There is an application process required to get VA loan eligibility restored, but some conditions automatically disqualify you from approval. Many times the reason for that disqualification is that there is some portion of the VA loan still outstanding. You won't qualify if:
- The previous loan was foreclosed upon and there is a balance outstanding;
- You surrendered the deed in lieu of foreclosure;
- The VA approved you for a compromise claim.
In cases like these, don't give up and assume you can't get any help from the VA. You may have partial eligibility available to you depending on your circumstances. According to the VA, veterans who have partial eligibility should check with their lender to see if the VA eligibility is enough for the loan and how much down payment would be needed in that specific situation.
To apply for restoration of your VA home loan benefits, start the process by filling out VA Form 26-1880. You'll need to submit proof the loan has been paid in full such as a statement from your loan officer or a HUD-1 settlement statement (issued for refinancing or sale of the property.)