How to Calculate a VA Mortgage Entitlement

By Shandell Williams

The VA, or Veterans Administration, mortgage entitlement is based upon a veteran's eligibility. In order to receive VA eligibility you must meet specific requirements; this includes dates served in the military, credit scores and debt-to-income ratio. VA is not a lending institution; it guarantees the lender repayment of the loan amount up to the predetermined mortgage entitlement amount for each VA loan. Lenders will not secure VA loans for ineligible veterans. All VA mortgage entitlements are predetermined for each eligible veteran.

Request a certificate of eligibility VA form 26-1880 from the United States Department of Veterans Affairs website or by contacting your mortgage lender. Most lenders have access to a VA system called Web LGY; this is used to access the form for eligibility.

Read and complete the VA form 26-1880 in its entirety. Once the form is complete, mail it to the address provided on the form and include proof of your military service dates.

Submit your certificate of eligibility to the lender that will secure your VA mortgage loan. Your debt to income ratio will be the determining factor on the amount of the loan you eventually qualify for, along with your credit history.

Determine the amount of the purchase price of the home you are interested in purchasing and be sure to add the VA funding fee into the total price of the loan. For example, if you are applying for a mortgage loan for $192,900, the VA funding fee would be $4,147, about 2.15 percent of the purchase price, bringing the total loan amount to $197,047; this amount does not include the origination fees, down payment, or other applicable closing costs due. The VA funding fee is required by law and is 2.15 percent for first-time VA loans and 3.3 percent thereafter.

Calculate your remaining VA mortgage entitlement. After you obtain the loan, subtract the total loan amount from the current VA mortgage entitlement. For example, if your total VA mortgage entitlement is $360,000 subtract the mortgage loan amount of $197,047 from this amount and the remaining VA entitlement is $162,953.

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