VA home loan entitlement and limits
Your Certificate of Eligibility (COE) for VA home loan benefits shows the amount of your entitlement for a VA home loan guaranty. Keep reading to learn about entitlement and home loan limits.
Understanding entitlement and your COE
In this section, we’ll explain some basic concepts of the VA home loan so the information on your COE makes sense.
How does a VA home loan guaranty help me?
A VA loan guaranty protects your lender from losing money if you default on your loan (don’t pay them back what you owe them). In most cases, this guaranty allows you to buy a home with no down payment. It’s called a “loan guaranty” because if you default on your loan, we promise (or guarantee) we’ll pay back your lender a percentage of your loan.
What’s the basic entitlement listed on my COE?
This dollar amount shows your lender the amount of your VA loan guaranty if the loan amount you want to get is $144,000 or less. We also call basic entitlement “first tier” or “tier 1” entitlement.
Examples of basic entitlement listed on a COE
THIS VETERAN’S BASIC ENTITLEMENT IS $36,000
What it means:
You have full entitlement
You don’t have a loan limit (as long as you can afford the loan amount and the property appraisal supports the purchase price of the home)
$36,000 isn’t the amount you can borrow. It’s the maximum amount we’ll pay your lender if you don’t pay them back on a loan that’s $144,000 or less. For a loan that’s more than $144,000, we guarantee to your lender that we’ll pay up to 25% of the loan amount.
Note: If your COE has a cash-out refinance condition, you can only use it for a cash-out refinance of the property identified in the COE.
THIS VETERAN’S BASIC ENTITLEMENT IS $0
What it means:
You don’t have any remaining basic entitlement
You have bonus entitlement to get a loan that’s more than $144,000
Does full entitlement mean I can get any size loan I want?
No. Even if you have full entitlement (your COE shows that your basic entitlement is $36,000), your lender will still need to approve you for a loan.
The lender will determine the size of the loan you can afford based on these factors:
- Your credit history
- Your income
- Any debts you may have
- Your assets (items of value like savings, retirement, and investment accounts)
Note: We don’t require a minimum credit score, but some lenders do have a requirement, so be sure to contact more than one lender to compare. The maximum VA loan on an individual property is either the appraised value of the property or the purchase price, whichever is lower.
Example: You were preapproved by a lender for a loan amount up to $450,000. If you sign a purchase contract agreeing to pay $400,000 for a property, but the appraisal value is only $375,000, then the loan amount would be capped at $375,000 (this would be the maximum loan amount you could get).
What’s bonus entitlement?
Bonus entitlement is the amount we agree to pay your lender if you don’t pay them back for a loan that’s more than $144,000. We also call bonus entitlement “second tier” or “tier 2” entitlement. Bonus entitlement isn’t listed on your COE because you’ll need to calculate it. Here’s what you need to know:
If you have full entitlement, bonus entitlement usually covers 25% of the amount a lender is willing to loan you. So, you’ll need to multiply the loan amount by .25.
If you don’t have full entitlement, your remaining bonus entitlement is based on the county loan limit where you plan to buy or refinance a home, minus the amount of your entitlement you’ve already used.
Find out more about calculating your remaining bonus entitlement in the next section.
Calculating your remaining bonus entitlement
In this section, we’ll take you step by step through how to find your county loan limit so you can calculate your remaining bonus entitlement. A lender will use your remaining bonus entitlement to determine the maximum amount they’ll loan you without requiring a down payment.
What’s my remaining bonus entitlement?
Follow these steps to calculate how much bonus entitlement you have left:
Check your COE to find the amount of entitlement you’ve already used. In the table called “Prior Loans charged to entitlement,” we list the amount you’ve already used in the Entitlement Charged column.
Check the county loan limit where the property is located. Since VA home loan limits are the same as the Federal Housing Finance Agency (FHFA) limits, you can find this information (called “conforming loan limit values”) on the FHFA website. You’ll want to use the One-Unit Limit, even if your property has more than one unit. Check the property’s county loan limit on the FHFA website
Multiply the county loan limit (use the One-Unit Limit) by .25 (this is 25%).
Subtract the amount in step 1 (the amount of entitlement you’ve already used) from the amount in step 3 (the One-Unit Limit multiplied by .25). This is your remaining bonus entitlement.
Example
Your COE shows in the Entitlement Charged column that you’ve already used $50,000. You have no remaining basic entitlement, but you can use bonus entitlement.
Here’s how to calculate your bonus entitlement:
The county loan limit (the One-Unit Limit) where the property is located is $900,000.
First, multiply the One-Unit Limit by .25: $900,000 x .25 = $225,000
Then, subtract the entitlement you’ve already used: $225,000 - $50,000 = $175,000
Your remaining bonus entitlement is $175,000.
Will I need to make a down payment if I have remaining bonus entitlement?
Your lender may require you to make a down payment if you don’t have enough remaining bonus entitlement for a 25% VA guaranty for the loan amount you want.
Most lenders require that your entitlement, down payment, or a combination of both covers at least 25% of your total loan amount.
If you’re able and willing to make a down payment, you may be able to borrow more than the county loan limit with a VA-backed loan. Remember, your lender will still need to approve you for the loan.
Example
We’ll continue with the amounts used in the example on this page.
Multiply your remaining bonus entitlement by 4: $175,000 x 4 = $700,000
$700,000 is the maximum amount most lenders would be willing to loan you without your needing to make a down payment.
If you have questions about your entitlement
You can talk to your lender. Or call us at
You can also ask us any questions you may have about your VA home loan benefits through our ServiceNow portal.