Great question: You are actually allowed to own two VA loans when you have your particular situation of being moved by the military. I am VA loan specialist and I would be happy to help you out. check out my VA special loan program at www.homesforheroes.com

Yes, it is possible to refinance the VA loan to a Conventional loan freeing up your eligibility with the VA. We'd have to look at the new loan amount compared to the appraised value but may even be able to consolidate both the VA loan and second mortgage into one new conventional loan. Another option would be to just refinance the first mortgage and leave the second mortgage as is. Feel free to email me directly at jason@areahomelending.com with any questions.

You could, if you were living in it - in today's market! Unfortunately, now that you have rented it out, it has become investment property. No one will refinance an investment property, in today's tight market. Anyone that tells you any different, is not being honest!