Colorado Second Tier Entitlement Calculator

The original VA loan had a basic entitlement that settled at $36,000 in the early 2000s, good for one VA loan up to $144,000 (four times the entitlement). Congress added a second tier, or bonus entitlement, in 2004 and tied it to the FHFA conforming loan limit, which is $832,750 in El Paso County and $862,500 in the Denver metro for 2026. The same law let veterans use the VA loan multiple times, limited only by the entitlement in use.

No. If you have full entitlement, the calculation doesn't apply. The Blue Water Navy Vietnam Veterans Act, effective in 2020, removed loan limits for veterans with full entitlement. Your maximum loan is only limited by what you qualify for and what a lender will lend.

It's a legacy government system. The COE hasn't been updated to show second-tier entitlement, especially since it changes every year with the loan limit. That's why it's essential to have a mortgage advisor calculate the full amount you have left.

Yes. This is one of the most common uses of bonus entitlement, especially with a PCS. Your current VA loan stays in place, and your remaining entitlement is used for the next home, which has to be your primary residence. Depending on the price, that may still be $0 down or need a modest down payment.

If the price is above your 100% financing threshold, the down payment is typically 25% of the difference between the purchase price and your maximum coverage. The calculator on this page gives you the exact figure in seconds.

Encumbered means there's a charge against your entitlement. Common causes:

• An outstanding VA loan.
• A past foreclosure where the VA paid a claim to the lender.
• A deed in lieu of foreclosure, for the same reason.

Here's an interesting fact: after a foreclosure or deed in lieu, the VA charges the full entitlement used, even if it paid out less. Say a veteran used $36,000 of entitlement and the VA paid the lender $15,000. The COE still shows $36,000 charged, but curing it later would cost $15,000, not $36,000.

Sell the home and pay off the VA loan, and your entitlement is restored for the next purchase. You can also get a one-time restoration if you've paid off the loan but kept the home. If another veteran assumes your loan and substitutes their own entitlement, yours is released as well.

See my main VA loan page for answers on the funding fee, credit scores, appraisals and seller-paid closing costs.