What Is VA Loan Entitlement?
VA loan entitlement is the dollar amount the Department of Veterans Affairs promises to pay your lender if you default on your mortgage. At Rank and Pay, we explain VA home loan rules, and this page works through the VA's own entitlement arithmetic.
A VA loan guaranty protects the mortgage lender from losing money if a borrower defaults on their payments. If you default, the VA promises to pay the lender a percentage of the outstanding loan balance. In most cases, this guaranty allows eligible service members, veterans, and surviving spouses to buy a home with no down payment.
Your Certificate of Eligibility (COE) establishes your official entitlement status. You can learn how to obtain this form through our COE form guide, or request it online through the VA home loans portal.
Two common cases appear on a COE:
- Basic entitlement of $36,000: This entry indicates you have full entitlement. You do not have an official loan limit as long as you can afford the loan amount and the property appraisal supports the purchase price.
- Basic entitlement of $0: This entry means you have no remaining basic entitlement. You have bonus entitlement for a loan over $144,000.
Basic Entitlement and Bonus Entitlement
Basic entitlement and bonus entitlement represent two distinct layers of the loan guaranty that the Department of Veterans Affairs provides to mortgage lenders. The VA also calls these tier 1 and tier 2.
Basic entitlement (tier 1) is the dollar figure listed on your COE that determines the guaranty for loans of $144,000 or less. The standard basic entitlement amount is $36,000. That $36,000 figure is not the cash amount you can borrow. It is the maximum dollar amount the VA will pay the lender if you default on a loan of $144,000 or less. For loans over $144,000, the VA guarantees up to 25% of the loan amount.
Bonus entitlement (tier 2) is the amount the VA agrees to pay the lender on loans that exceed $144,000. Bonus entitlement is not listed on your COE; the borrower calculates it. With full entitlement, bonus entitlement usually covers 25% of the loan amount the lender is willing to make. Without full entitlement, remaining bonus entitlement is based on the county loan limit where the property is located, minus the entitlement already used.
| Entitlement Tier | Display on COE | Loan Amount Range | Guaranty Calculation |
|---|---|---|---|
| Basic Entitlement (Tier 1) | Shows $36,000 or $0 | $144,000 or less | Up to $36,000 |
| Bonus Entitlement (Tier 2) | Not printed on COE | Loans over $144,000 | 25% of loan amount or calculated from county limit |
Full Entitlement and Lender Approval
Full entitlement removes the VA loan limit, but having full entitlement does not guarantee loan approval for any requested amount. The lender still approves you based on your financial profile.
Lenders evaluate your financial profile before issuing a loan commitment. Approval depends on your credit history, income, debts, and assets (savings, retirement, investment accounts). A lender may decline your application even if you have full entitlement available. The VA does not require a minimum credit score, but some lenders do, so compare more than one lender. You can see how this structure compares to conventional financing in our guide on VA loans vs conventional loans.
The maximum VA loan on an individual property is the appraised value or the purchase price, whichever is lower. Consider a scenario where you are preapproved for up to $450,000 and enter a contract to buy a home for $400,000. If the property appraisal comes in at $375,000, the VA loan is capped at $375,000. The $25,000 gap between the contract price and the appraisal must be resolved outside the loan. For a broader overview of the loan benefit, see our VA home loan guide.
Remaining Bonus Entitlement Calculation
Calculating your remaining bonus entitlement requires four arithmetic steps using your Certificate of Eligibility and the local county loan limit. The VA gives this four-step calculation for a loan over $144,000.
- On your COE, find the entitlement already used in the "Entitlement Charged" column of the "Prior Loans charged to entitlement" table.
- Find the county loan limit for the property. Official VA limits equal the Federal Housing Finance Agency (FHFA) conforming loan limit values. Review the current numbers on the FHFA conforming loan limit values page. You must use the One-Unit Limit even for a multi-unit property. You can review general rules through the VA loan limits page.
- Multiply the One-Unit Limit by .25.
- Subtract the amount from step 1 (entitlement already used) from the figure in step 3. The difference is your remaining bonus entitlement.
The VA provides an official worked arithmetic example to demonstrate how this calculation works:
- A borrower has already used $50,000 of entitlement on a previous home.
- The county where the home sits has a One-Unit Limit of $900,000. The $900,000 figure is the VA's illustration, not a real county limit.
- Multiply the One-Unit Limit by .25: $900,000 multiplied by .25 equals $225,000.
- Subtract the $50,000 already used from $225,000: $225,000 minus $50,000 equals $175,000 in remaining bonus entitlement.
Entitlement and Down Payments
The lender may require a down payment if remaining bonus entitlement does not cover a 25% guaranty for the desired loan amount.
Most lenders require entitlement, a down payment, or a combination of both to cover at least 25% of the total loan amount. Using the VA's worked example, take the remaining bonus entitlement figure of $175,000 and multiply it by 4: $175,000 multiplied by 4 equals $700,000. That $700,000 amount is the most most lenders would lend with no down payment.
A borrower willing to make a down payment may be able to borrow more than the county loan limit, provided the lender approves their income, credit, and assets. The funding fee rate also changes with the down payment; see our guide to the VA loan funding fee.
Entitlement Lines on Your COE
Your COE shows the entitlement already used in the "Entitlement Charged" column.
Locate the section labeled "Prior Loans charged to entitlement". Look across the rows to find the "Entitlement Charged" column, which shows the entitlement already used on each previous VA transaction. If you need details on how loan transfers operate, read our guide on VA loan assumption.
If your COE has a cash-out refinance condition, it can only be used for a cash-out refinance of the property named on the COE. For a comparison of loan refinancing paths, see our guide on VA IRRRL vs cash-out refinance.
If you have questions about your records, contact your mortgage lender, speak with VA home loan representatives, or use the VA ServiceNow portal (see the VA home loans page).
Next Steps for Checking Your Entitlement
The next concrete action is to request your Certificate of Eligibility and review your Entitlement Charged column. You can submit a request directly through the official VA request page.
Once you have the document, verify whether your basic entitlement reads $36,000 or $0. If you have prior charges, locate your target county's One-Unit Limit on the FHFA conforming loan limit values page and run the four-step arithmetic calculation to confirm your remaining bonus entitlement.
This explainer provides general information about government loan rules and is not legal, tax, or financial advice. Verify your entitlement and loan details directly with the Department of Veterans Affairs or your mortgage lender.