You can obtain another VA loan after you have experienced a short sale, foreclosure or deed-in lieu foreclosure with an existing VA loan. But there is no guarantee…you must determine how much (if any) entitlement you have left previous post to learn and meet the necessary salary and credit qualifications. Remember that your credit score will be “dinged” for having undergone a short sale or foreclosure and it may take time to rebuild. However, the VA program is one of the most lenient in granting loans to veterans who are applying for a mortgage after a foreclosure.
First of all, you need to wait 2 years from the time of your foreclosure in order to apply for your new VA loan. Then you must determine your remaining entitlement. The full VA entitlement (the amount the government guarantees the lender) is $417,000, with $36,000 as your primary entitlement and $68,250 as your secondary entitlement. The VA guarantees one quarter of that amount if you should default and does not require you to have mortgage insurance.
Suppose you have $50,000 in unpaid VA loans remaining on your foreclosed property. A VA-approved lender will subtract that $50,000 from $104,250 ($36,000 + 68,250), which is your full entitlement amount. The difference is $54,250. You can then multiply $54,250 by four to calculate how much you may be able to borrow with no money down—a total of $217,000 ($54,250 x 4).
Veterans who want to use their second-tier entitlement must seek a loan amount of at least $144,000. If you are interested in applying for a VA loan, whether it’s your first, or a subsequent one, we at Springs Homes can refer you to a trustworthy lender who is familiar with the process.