Kitsap County VA Loans: A Practical Guide for Service Members and Veterans

"Full entitlement" is the key phrase. Since January 1, 2020, borrowers with full entitlement have no VA loan limit. You generally have full entitlement if you have never used the benefit, if you used it and paid the loan off and sold the home, or if a prior VA loan ended in a claim that you repaid in full. With full entitlement, VA guarantees up to 25% of the loan amount, which is why lenders can offer financing with no down payment.

No down payment does not mean no cash. Expect to need money for the earnest money deposit, the home inspection, and possibly some closing costs. Most VA buyers also pay a one-time VA funding fee, which can be financed into the loan. For a first-time VA purchase with less than 5% down, the fee is 2.15% of the loan amount; it is lower with a down payment and higher for subsequent use with less than 5% down. Veterans who receive VA compensation for a service-connected disability, eligible surviving spouses receiving Dependency and Indemnity Compensation, and active-duty Purple Heart recipients are exempt. Check the current table on VA.gov (opens in a new tab).

The first step is your Certificate of Eligibility (COE). A lender can usually pull it electronically in minutes; if not, you can request it through VA.gov.

VA looks at debt-to-income ratio (DTI) too, using 41% as a benchmark, but a borrower above 41% can still be approved when residual income comfortably exceeds the guideline.

Household size is counted carefully. Everyone in the household generally counts toward family size, including a spouse who is not on the loan and children, even if their income is not used. Lenders also apply a maintenance-and-utilities estimate based on the home's square footage, so a larger, older Kitsap home with higher heating costs can change the result.

Want to see where you stand? Try our VA residual income calculator. The output is an estimate only, not a commitment to lend; the underwriter's figures will control.

VA draws a line between two kinds of seller help:

• Normal closing costs and discount points (for example, loan origination, title, recording, appraisal). The seller may pay these and they do not count toward the 4% limit.
• Concessions, which VA defines as anything of value added to the transaction beyond normal costs. Examples include prepaying the buyer's property taxes and insurance, paying the VA funding fee, paying off the buyer's debts, gifts such as appliances, and funding a temporary buydown.

A temporary buydown (often called a 2-1 or 1-0 buydown) lowers the payment for the first year or two using money placed in escrow. VA updated its Handbook in 2023 to clarify how buydowns work; lenders still underwrite you at the full note rate, not the reduced first-year rate, so the buydown helps cash flow but not qualifying. Compare the cost of a buydown against a permanent rate reduction with our buydown calculator.

This comes up constantly in Kitsap County because of PCS moves: a sailor buys in Silverdale, transfers away, keeps the home as a rental, then returns years later.

With entitlement still in use, the county conforming loan limit matters again. VA's method: take the county's one-unit conforming limit from FHFA, multiply by 25%, and subtract the entitlement already in use. The result is the maximum guaranty available. If the new loan needs more guaranty than you have left, a down payment can cover the gap. Our VA entitlement calculator walks through the math.

To restore entitlement, the prior VA loan must be paid in full and the property sold, or another eligible veteran must assume the loan and substitute their own entitlement. VA also allows a one-time restoration when the loan is paid off but you still own the property. Requests are made with VA Form 26-1880 (opens in a new tab).

Underwriters count the departing home's payment in full unless it is paid off or offset by documented rental income, typically a signed lease, deposit receipt, and an appraiser's rent estimate. If you have never been a landlord, expect the lender to discount or limit rental income and to look harder at reserves.

You must intend to occupy the new home as your primary residence. VA generally expects occupancy within a reasonable time after closing (usually 60 days), with exceptions for deployed service members, where a spouse can satisfy occupancy.

Small multi-family properties in Bremerton and Port Orchard can let an owner-occupant offset part of the payment with rent. Underwriting is stricter: the appraiser reports market rents, the lender typically uses only part of the projected rent, and VA guidance points to reserves (often around six months of payments) when the borrower is relying on rental income without a landlord track record. Entitlement still matters: with full entitlement there is no loan limit, but with partial entitlement the 25% guaranty math above applies.

MPRs cover items like a sound roof, safe electrical and heating systems, adequate water and sewage, safe access to the property, and no evidence of hazards such as defective paint on older homes. Kitsap's mix of older Bremerton housing stock and wooded, rural lots means repair conditions (peeling paint, roof wear, crawlspace moisture) are not unusual. Required repairs are typically completed before closing and re-inspected.

If the value comes in low, VA's Tidewater process gives the lender a chance to submit additional comparable sales before the report is finalized, and a reconsideration of value (ROV) can be requested afterward. If the value stays low, buyers can renegotiate, pay the difference in cash, or cancel under the contract's VA escape clause. A home inspection is still strongly recommended.

Bangor sits north of Silverdale, the shipyard is in Bremerton, and Keyport (home to the Naval Undersea Warfare Center Division Keyport) is near Poulsbo. Commutes shape where people buy: Silverdale and Central Kitsap for Bangor, Bremerton and Port Orchard for the shipyard, Poulsbo for Keyport.

For military buyers, Basic Allowance for Housing (BAH) can count as qualifying income, and if you may rent the home after a future transfer, plan your entitlement strategy now. See our guides to Silverdale, Bremerton, and Poulsbo.