Maximizing VA Loan Benefits in Tennessee

VA entitlement explained

VA entitlement is the amount the VA guarantees on a VA loan. There are two tiers: basic entitlement ($36,000) and bonus entitlement (the remainder up to the conforming loan limit). For most veterans with full entitlement, there is no VA loan limit — you can borrow as much as a lender will approve with zero down.

Full entitlement is available if you've never used a VA loan, or if you've paid off a prior VA loan and had the entitlement restored. Reduced entitlement occurs when you have an active VA loan or had a VA foreclosure where the VA paid a claim.

VA funding fee and exemptions

The VA funding fee is a one-time fee paid at closing (or financed into the loan). It ranges from 1.25% to 3.3% of the loan amount depending on down payment, loan type, and whether it's a first or subsequent use of VA benefits.

Veterans with a service-connected disability rating of 10% or higher are exempt from the funding fee entirely. Surviving spouses of veterans who died in service or from a service-connected disability are also exempt. This exemption can save thousands of dollars — it's important to confirm disability status before closing.

If you receive disability compensation, you are exempt. If your disability rating is pending at the time of closing, you may be eligible for a refund of the funding fee once the rating is approved.

Using VA benefits more than once

VA benefits can be used multiple times. If you've paid off a prior VA loan, you can apply for entitlement restoration and use VA benefits again. If you still have an active VA loan, you may be able to use remaining entitlement for a second VA loan simultaneously — this is called "bonus entitlement" or "second-tier entitlement."

Morgan Hardy can pull your Certificate of Eligibility (COE) and determine your current entitlement status before you apply.

When VA might not be the best choice

VA is almost always the best option for eligible borrowers — but there are exceptions. If you have 20%+ down and excellent credit, conventional may offer a lower rate without the funding fee. For investment properties, VA is not available (primary residence only). For condos, the project must be VA-approved. Morgan Hardy can compare VA against conventional for your specific situation.