Dual Military VA Home Loans - Entitlement Options for Couples

Dual military couples have several ways they can use their VA loan benefits to buy a home. There are also some key considerations when it comes to VA loan entitlement and the VA funding fee.

While understanding dual military VA loan benefits is helpful, we recommend talking to a VA loan expert to get the most out of your VA loan benefits. One of the first big questions for dual military couples is: How do we want to approach using our VA loan entitlement?

Use All Entitlement for One Borrower & Save the Rest

Veterans use at least some of their entitlement every time they buy with a VA loan. When both Veterans or service members have their full VA loan entitlement available, one Veteran alone can use their entitlement.

This lets you save the other spouse’s full entitlement for future use. While the VA loan isn’t a one-time benefit, purchasing without your full entitlement can introduce challenges like a down payment.

Retaining a spouse’s full entitlement can also be cheaper if you buy again in the future. The VA funding fee is lower the first time you buy with a VA loan, rising slightly for all subsequent purchases.

Both Veterans can be on the mortgage even if only one is contributing VA loan entitlement toward the loan. Anyone on the loan will need to meet VA and lender requirements for credit, debts and income.

Each Veteran Contributes VA Loan Entitlement

Another option is that each Veteran or service member uses a portion of their VA loan entitlement. This can be key if both borrowers have diminished entitlement, either because of an active VA mortgage or a previous default.

In situations like this, each Veteran can contribute some or all of their remaining entitlement toward a new loan. The potential catch is that the VA loan limits can come into play in situations like this, ultimately leaving Veterans in need of a down payment.

These scenarios can get confusing in a hurry. Talk with a VA loan expert about what’s possible given your specific situation.

Dual Entitlement & VA Funding Fees

The other big consideration with dual entitlement scenarios is the VA funding fee. This fee goes to the VA to help keep the loan program going.

The funding fee is 2.3% of the loan the first time you buy a home with your VA loan benefit. For every purchase afterward, the fee rises to 3.6%. On a $300,000 home purchase, that fee ranges from $6,450 for first use to $10,800 for subsequent use. Most Veterans choose to finance this fee into their loan.

Veterans receiving compensation for a service-connected disability don’t have to pay the funding fee. That exemption can create a savings opportunity for dual military couples.

If both Veterans have their full entitlement but one is exempt from the funding fee, then it typically makes sense for only the Veteran with the exemption to use entitlement on the loan.

When two Veterans each use entitlement on a loan but only one has a funding fee exemption, the fee on that loan is still in play, but it’s cut in half.

Occupancy Considerations

No matter which dual military VA loan option you pick, VA purchase loans have occupancy requirements: Veterans contributing entitlement toward a home purchase have to intend to occupy the new home as their primary residence.

You’ll typically need to occupy the home within 60 days of closing, but there can be exceptions.

Lenders assess occupancy situations on a case-by-case basis. Talk with a VA lender if you have questions about occupancy or about your particular VA loan entitlement scenario.