- You can sell a home with a VA loan at any time.
- A Veteran or civilian buyer may be able to assume your loan.
- Selling your VA-financed home can restore your entitlement, allowing you to use your VA benefit again.
Selling your home with an existing mortgage balance is certainly possible. In fact, many homeowners do just that if they’re looking to upsize or downsize before the end of the loan term.
Let’s take a look at the process for selling a home with a VA loan.
Can You Sell a House With a VA Loan?
Yes, you can sell a house purchased with a VA loan. When the sale closes, the proceeds go toward paying off your VA loan. Once the loan balance is cleared, your VA entitlement is restored and ready for future use.
Another option is to let a Veteran or civilian buyer assume your VA loan. This can make your home more attractive if your VA mortgage rate is lower than the current market rate, as the buyer can take over your existing loan instead of starting a new one.
However, if a civilian assumes your VA loan, your entitlement is tied to that home, and you’ll need to use second-tier entitlement on your next VA home purchase.
How Soon Can I Sell My House With a VA Loan?
With VA mortgages, you can technically sell the home whenever you want. The VA has no requirements regarding the timeframe for selling the home.
Your lender may prefer you to stay in the home for at least a year or until you have enough equity to break even. However, you can sell before that time period with a legitimate reason, such as a Permanent Change of Station (PCS).
What Happens When You Sell a House With a VA Mortgage?
When you sell a home, the funds you receive as part of the sale should pay off part or all of your remaining loan balance and any closing costs.
If you have sufficient equity saved in your home, you may have money left over from the sale. That goes directly to you. But if you want to sell the home soon after purchasing, things may not be so simple.
In either instance, the first step is to talk to your lender. They'll be able to determine your mortgage payoff amount and current home equity.
Mortgage Payoff Quote
Your mortgage payoff amount is the amount needed to close the loan account. This is slightly different from your remaining balance, as it includes accrued interest and other fees the lender might add.
It’s essential to know that a payoff quote typically has an expiration date, which ranges from 10 to 30 days. After that, you’ll need to get an updated one.
Determining Home Equity
Home equity is the financial stake you have in your home. It's the difference between what you currently owe on your mortgage and what your house is worth on the market.
Equity also represents what you earn on your home when you sell it, minus the loan payoff and other sales-related expenses. Subtracting the amount owed on your mortgage from the approximate market value of your home will help determine your total home equity.
Interested in selling your home with a VA mortgage? Connect with an agent at Veterans United Realty to learn more about your options.
What if I Have Negative Equity?
Negative equity occurs when the loan amount exceeds the current market value of your house. This can make it difficult to sell or refinance your house. Below are some examples where you might have negative equity.
Short Sale
A short sale takes place when your lender allows you to sell the home for less than the remaining balance on the loan. With this option, lenders can recoup at least some cash, while avoiding the hassle and expense of foreclosure.
Keep in mind that a short sale could negatively impact your ability to purchase a new home in the future. Additionally, you’ll forfeit your original down payment and your credit score will likely take a hit.
Home Equity Line of Credit (HELOC)
A HELOC is a line of credit that uses your home equity as collateral. This means you can pull out money from your earned equity without having to sell your home.
HELOCs consist of a draw period and a repayment period. These periods can last anywhere from 15 to 30 years and can put your home equity into negative territory, making it more difficult to sell.
VA Cash-Out Refinance
A VA Cash-Out refinance creates a new loan on your home, allowing you to convert your home equity into cash. Lenders typically let you borrow up to 90% of your home's value, as long as you meet specific VA guidelines.
These guidelines include at least six monthly payments on your current loan, and a refinance date at least 210 days after the first payment was due on your current loan.
While this option can provide you with extra cash similar to HELOCs, it can also create negative home equity.
Outstanding Mortgage With a Typical Home Sale
During a typical home sale, you should be able to sell your home for more than what you owe on the mortgage. Those funds are used to cover additional expenses from the sale, with the remainder representing your profit. It is important to calculate the estimated profit from selling your home before starting the process, so you have an idea of the equity in your house.
Here's how the proceeds from your home sale are directed:
1. Existing Mortgage
The majority of the funds generated from the sale will first be applied toward the remaining mortgage balance on the home you sold. In most cases, you should be able to pay that loan off, with some funds left over.
2. Additional Loans and Liens
If there are existing home equity loans or tax liens against the house you sold, these must be paid off by the sales proceeds. These loans might include HELOCs or second mortgages.
3. Transactions and Closing Costs
Other fees connected to home sales can include agent commission, transfer taxes, title insurance fees, attorney costs and any repairs or remediations made to the home.
4. Remaining Money
Anything remaining after the above has been paid off is your profit; you can do with that extra money as you wish.
Impact of Selling Your Home on VA Loan Entitlement
Every time you use a VA loan, you lose a portion of your VA loan entitlement. Your entitlement is tied up with your property until the loan is fully repaid.
If you sell your home and pay off the loan balance, you can restore your entitlement and use your VA loan benefit again. If you're selling your home through a short sale, however, you won't be able to pay off the entire loan.
This means that the portion of your VA entitlement used on your home loan will no longer be accessible. The only way to restore that entitlement is to reimburse the VA, which is typically not a good financial decision. However, you may still have sufficient remaining second-tier entitlement to purchase a future home without a down payment.
It is possible to sell your home with an existing mortgage, and many homeowners do just that. For more information, contact a Home Loan Specialist at Veterans United to discuss next steps and available options.
You can also use Veterans United Realty to sell your home. Veterans United Realty is an independent affiliate partner of Veterans United Home Loans, featuring a nationwide network of VA-knowledgeable real estate agents ready to help you make the most of your hard-earned benefits.
How We Maintain Content Accuracy
Our mortgage experts continuously track industry trends, regulatory changes, and market conditions to keep our information accurate and relevant. We update our articles whenever new insights or updates become available to help you make informed homebuying and selling decisions.
Current Version
Dec 16, 2025
Written ByChris Birk
Reviewed ByLida Meyer
Major updates to content to improve understanding and context. Article fact checked and reviewed by underwriter Lida Meyer.
Related Posts
-
5 Most Common VA Loan Myths BustedVA loan myths confuse and deter many VA loan borrowers. Here we debunk 5 of the most common VA loan myths so that you can borrow with confidence. -
VA Loan Down Payment RequirementsVA loans have no down payment requirements as long as the Veteran has full entitlement, but only 3-in-10 Veterans know they can buy a home loan with zero down payment. Here’s what Veterans need to know about VA loan down payment requirements.
