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What is an entitlement?

April 26, 2017Entitlement

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What is an entitlement?

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An entitlement is the amount the VA promises will be paid to the lender if you default on your loan. If that happens, the VA may pursue you to recover those funds. An entitlement is not a cash payment to you or to the bank.

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The “entitlement” is the maximum dollar amount the VA will pay the lender if you default on your loan. The standard VA entitlement is $36,000. However, there are some circumstances in which a borrower can qualify for an entitlement of up to $60,000. Lenders will usually offer a loan amount of up to four times the amount of the borrower’s entitlement without requiring a down payment.