Can you get a VA loan after a short sale, and how soon?

By James Sanson, REALTOR® · Updated October 2026

Two separate things decide whether you can get a VA loan after a short sale, and they are handled by two different parts of VA. One is entitlement: how much guaranty you have left after VA paid a claim on the old loan. The other is credit: whether a lender can find you a satisfactory credit risk under VA's underwriting chapter. You can pass one and fail the other, so this page takes them in turn.

What happens to your entitlement after a VA short sale?

If the short sale results in a loss and VA pays a claim under the guaranty, the entitlement you used on that loan stays charged. VA's Circular 26-18-25 states it directly: for a loan terminated by foreclosure, short sale, or deed-in-lieu with a claim paid, VA no longer establishes a debt against a veteran on loans originated on or after January 1, 1990, but 38 U.S.C. 3702(b)(1)(B) requires the loss to be reimbursed in full before full entitlement is restored. The circular adds two points worth keeping: the amount is the claim VA paid, not the loan balance, and the loss affects only the home loan benefit, not any other VA benefit.

That leaves two paths. Repay VA the claim amount and request restoration, or use whatever entitlement remains. The Lender's Handbook lists the situations in which previously used entitlement is restored (Chapter 2, section 2.06): the property was sold and the loan paid in full; an eligible veteran assumed the loan and substituted entitlement; a cash-out refinance on the same property paid the prior loan in full; or the one-time restoration when the prior loan was paid in full and you kept the property. A short sale with a claim paid fits none of those on its own, which is why repayment is the route the circular describes.

Remaining entitlement is real and usable. Your Certificate of Eligibility shows it. A VA-experienced lender reads the COE with you and tells you what a purchase with partial entitlement looks like; that conversation belongs with the lender, not with this page.

What does VA's credit rule say about a short sale in your history?

The Lender's Handbook credit chapter treats a short sale in lieu of foreclosure the same way it treats a foreclosure or a deed-in-lieu (Chapter 4, Topic 7). The paragraph makes three points. The event does not by itself disqualify the loan; the lender must develop the facts and circumstances. A foreclosure finalized more than two years before the new closing may be disregarded. Within one to two years, the Handbook says it is probably not possible to find a satisfactory credit risk unless both of the following are true: you have obtained credit since the event and paid it satisfactorily over a continued period, and the event was caused by circumstances beyond your control, such as unemployment or medical bills not covered by insurance.

Two things follow from that text. First, VA sets no fixed waiting period for a short sale; the two-year figure is where the Handbook says a lender may stop asking questions, not a bar before it. Second, lenders may apply their own stricter overlays, and many do. Whether a particular lender will originate within two years is that lender's policy, and the only way to know is to ask.

What order should you do this in?

1. Pull your current Certificate of Eligibility so you know what entitlement remains and whether a claim was paid. Request one through VA's online tool or with VA Form 26-1880, Request for a Certificate of Eligibility.
2. If you intend to repay the claim to restore full entitlement, contact VA's Debt Management Center for the amount and process, then submit the restoration request with proof of repayment.
3. Document the cause of the hardship and every account you have paid on time since. That is what the Handbook's credit paragraph asks a lender to see.
4. Talk to more than one VA-experienced lender, because overlays differ. heroSOLD is not a lender and does not originate loans; if you want names to interview, say so in the form and you will get more than one with no fee or arrangement.

For what the short sale does to any remaining debt, see do you owe the difference after a VA short sale. For the rules the sale itself has to meet, see the VA short sale guidelines. The overview is on how a short sale works on a VA loan.

Frequently asked questions

Sources, read on September 26, 2026: 38 CFR 36.4322(e); VA Servicer Handbook M26-4, Chapter 5, sections 5.01, 5.08 and 5.10 (Change 13, June 1, 2026); 38 U.S.C. 3703(e); VA Circular 26-18-25 (October 30, 2018); VA Lender's Handbook, Pamphlet 26-7, Chapter 2 section 2.06 and Chapter 4 Topic 7. heroSOLD is not a lender, not a law firm, and not affiliated with the Department of Veterans Affairs. Rules change; confirm the current text with your servicer, a VA loan technician at 877-827-3702, or an attorney.