Restoration of Entitlement

(Lender’s Handbook, Chapter 2, Topic 6)

To qualify for restoration of entitlement, one of the following requirements must be met:

• The prior VA loan must be paid in full and/or the property disposed of, OR
• The prior VA loan must have been assumed by an eligible veteran who substituted his/her entitlement.

Note: Lenders should request restoration prior to closing the new loan. Lenders are also encouraged to research the veteran’s prior loans to confirm those loans using VA entitlement.

DOCUMENTS REQUIRED FOR RESTORATION

• VA Form 26-1880, completed, signed and dated by the veteran.
• Evidence that previous loan is paid in full.
• Proof of Service

SPECIAL ONE - TIME RESTORATION

Home loan entitlement may be restored one time only, if the veteran has repaid the prior VA loan in full, but has not disposed of the property securing the loan.

After such a restoration, any future restoration will require the veteran to dispose of all property financed with a VA loan, including the property not disposed of under the “one time only” exception.

Documentation requirements are the same as those listed above.

DIVORCE CASES