Making Sense of Your VA Loan Entitlement

To understand VA Loan Entitlement, veterans should know what it is and what it is not. When used in relation to VA guaranteed home loans, the term “entitlement” is a reference to the maximum guarantee for each eligible borrower that the VA provides to the lender. It is not the maximum VA loan amount a veteran can get, nor a payment made to the veteran.

When considering a VA loan, many veterans start by looking up their entitlement online at the Veterans Information Portal. A common figure is $36,000, but borrowers should not assume that’s all the entitlement available. All first-time users of VA home loan benefits start with enough entitlement for a mortgage of $417,000 (more in certain high-cost counties). Of course, borrowers must qualify with enough income and credit, among other requirements, for a loan of any amount regardless of how much entitlement they have. Having enough entitlement is one requirement in getting a VA home loan.  

VA entitlement has two parts: basic and bonus

If you’re eligible for the VA home loan program, and have never used the program, then you have basic and bonus VA entitlement. The $36,000 figure many see on their Certificate of Eligibility (COE) refers to a portion of entitlement known as “basic”. This is the VA’s maximum guarantee for loans up to $144,000. Many veterans are surprised to hear, after speaking with an experienced loan officer, that they have additional entitlement to use for loans over $144,000.

“Bonus” entitlement is up to an additional $68,250, and in certain counties, described below, even more. This amount, sometimes referred to as Tier 2 or Additional entitlement, is only used for VA loans between $144,000 and the conforming limit, which is generally $417,000. In certain high-cost counties the conforming limit is higher, and the amount of bonus entitlement is higher as well. 

Basic entitlement and bonus entitlement together are enough for a VA loan of $417,000 or more when added to basic entitlement, bonus entitlement gives eligible veterans enough VA backing for a loan of up to $417,000, or more in high-cost areas. A VA loan officer can help calculate the maximum mortgage loan amount for which the VA will provide its guarantee based on how much entitlement a borrower has available. As a rule of thumb, the maximum loan amount for loans over $144,000 is four times the amount of full entitlement. The calculation for full entitlement in most areas of the country looks like this:

  • Basic entitlement is $36,000 x 4 = $144,000
  • Bonus entitlement is $68,250 x 4 = $273,000
  • $144,000 + $273,000 = $417,000 (the maximum loan value for which the VA will guarantee)

In some high-cost areas of such as California, New York, New Jersey and other states this calculation can be higher to give eligible veterans the potential to purchase a home in line with higher-priced housing markets. For more information, contact a VA-approved lender.


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