There Is An Exception
Youre always free to move. That means the property that used to be your primary address can always become a vacation home without forcing you to refinance into a traditional mortgage. If you have remaining entitlement, you may be able to use it to buy another home in your new location without having to sell your vacation home.
What Are The Stipulations
Acquiring a second VA loan does come with certain conditions.With most lenders, you must have a renter locked into a lease and a security deposit to offset your first VA loan mortgage payment. While having a renter locked in helps your debt-to-income ratio because it offsets your mortgage payment, unfortunately, any additional rental income cant be used towards qualifying for your second loan. For example, say your monthly mortgage payment is $800, but youre going to charge your renters $1,000. That $200 extra cant be used as additional income to qualify for a second VA loan. Income qualification for secondary properties can vary by lender, so be sure to ask about the necessary underwriting guidelines when applying for a second home.Additionally, youll still need to meet the occupancy requirements of a VA loan, meaning that this new home must be your primary residence. Youll need to occupy your new home before a certain time period passes following your closing.VA loans are arguably the best loan program available. So if youre eligible, be sure you know how to take full advantage. If you have questions about keeping your home and buying again, please feel free to contact a mortgage banker.
How Can I Find Out How Much Entitlement I Have Left
The COE shows how much entitlement you have left. You can request your COE through the VAs ebenefits portal.
If you have remaining entitlement, the COE will update to reflect the left over amount. It will have two lines, the entitlement amount and what was charged previously.
Want a faster way to get your COE? Ask your loan officer to pull it when you apply for the loan. They can access it within a few minutes and save you the extra step.
You May Like: Great Family Vacations In New England
Relocating In A Hurry Use A Va Loan For A Second Home
Moving around is a fact of life for many military families. You get settled into one place for a few years, and then your new orders come and youre off to a new city.
That can be a great way to see the country but it can make homeownership challenging, especially if youre only a few years into your VA mortgage.
Fortunately, the U.S. Department of Veterans Affairs , which insures VA loans, makes provisions for that.
In some cases, you can take out a VA loan for a second home as you move to your new base. Heres how.
Finance 2 Homes Using Va Loans
One of the ultimate sacrifices that someone can make is risking their life by volunteering in the US Armed Forces.
One of the benefits of being a member of the military, or being a former member, is being able to take advantage of mortgages provided by the Veterans Association. VA home loans come with affordable interest rates and typically have lower requirements when it comes to down payment, credit scores, and income levels.
While VA home loans are great financing options, they are generally intended to be used for primary residences only. In no situation is it permitted to use a VA mortgage to buy an investment property or vacation home.
Because of this, it can be difficult to use a VA home loan to finance 2 homes. However, there are some situations when it may be possible to have more than one VA home loan out at one time.
Va Adaptive Housing Grants
Disabled veterans may have distinct needs when it comes to housing. That can prove a challenge during the house-hunting stage. The VA has two grant programs that can help veterans with certain permanent and total service-connected disabilities build or modify a home to best meet their needs.
One is the Specially Adapted Housing grant, and the other is the Special Housing Adaptation grant. Renovations and modifications can include accessible bathrooms, bedrooms and kitchens specially sized doorways garages and carports retrofitted faucets and showerheads ramps and banisters and a host of other important changes.
The maximum dollar amount available for these grants is set by law but can change annually depending on construction costs and other factors. Veterans interested in exploring the SAH and SHA grants can apply online through the VA’s eBenefits portal or contact their nearest VA regional office for more information.
Va Loans For Retirement Homes
Another reason why VA loans have become a popular part of the VA Benefits package is that VA loans can be used to purchase second homes and retirement residences.
Federal regulations do limit loans guaranteed by the Department of Veterans Affairs to primary residences only, however, primary residence is defined as the home in which you live most of the year.
Therefore, if you own an outofstate residence in which you live for more than 6 months of the year, this other home, whether its your vacation home or retirement property, becomes your official primary residence.
For this reason, VA loans are popular among aging military borrowers.
Since 2010, the share of VA loans made to veterans of the Korean Conflict and the Vietnam War era has increased by 50 percent, and now accounts for 14% of all VA loans guaranteed by the agency.
Borrowing among Reservists is up, too.
According to the Department of Veterans Affairs Annual Benefits Report, Reservists have increased their share of VA loans made from 15.6% to 19.3% since 2010.
Men and women who have completed six years of service in the National Guard or Reserves are eligible for VA Home Loan benefits, but may be eligible sooner typically if 90 days have been served on active duty during wartime.
Don’t Miss: Vacation Rentals South Congress Austin
Va Minimum Property Requirements
Whether its your first or second home, your new property must meet the VAs Minimum Property Requirements.
The VA will send an appraiser to see whether the home youre buying measures up. Your new home must have:
- Access to water and sewer
- Heating and electricity
- A roof that will last at least three more years
- A basement or crawl space thats properly vented and free of debris
- Access from a public or private street year-round
- No exposed lead-based paint
- No construction defects or material decay
- No termites
If your home fails to meet the VAs standard, the seller must bring the home into compliance. You may need to choose a different home if the current owner cant or wont make the repairs.
The owner could also provide the money for repairs by accepting a lower price for the home. Then you could complete repairs after closing on the loan.
Rental Property As Income
Becoming a landlord can essentially make qualifying for a VA loan easier. A borrower can use rents from the other units in a multi-unit property to help them qualify for a loan by counting the rent toward income, says Brian Davis, a real estate investor who teaches about rental investing at SnapLandlord.com.
Typically they can add 75 percent of the market rents toward their qualifying income, he says.
The home appraisal can include the market rents in the area, and a borrower doesnt have to always show that they have tenants ready to move in, Stobbe says.
Its best to show you have a tenant signed up, but its not always necessary, she says.
Recommended Reading: Na Hale O Keauhou Vacation Rentals
What If I Dont Meet The Minimum Service Requirements
You may still be able to get a COE if you were discharged for one of the reasons listed below.
You must have been discharged for one of these reasons:
- Hardship, or
- The convenience of the government , or
- Early out , or
- Reduction in force, or
- Certain medical conditions, or
- A service-connected disability
Exceptions To The Va Loan Occupancy Requirements
There are a few scenarios and living situations in which a VA buyer can purchase a home and occupy it after the 60-day mark. Still, the VA typically requires service members set an occupancy date for less than 12 months after closing a loan. In addition, service members need to make clear the specific date occupancy will occur and the specific event that will make occupancy possible.
Here are a few common situations in which an extension might be permissible:
Don’t Miss: Can You Make Payments On A Disney Vacation
Eligibility Requirements For Va Home Loan Programs
Learn about VA home loan eligibility requirements for a VA direct or VA-backed loan. Find out how to apply for a Certificate of Eligibility to show your lender that you qualify based on your service history and duty status. Keep in mind that for a VA-backed home loan, youll also need to meet your lenders credit and income loan requirements to receive financing.
Va Loans And Primary Residences
VA loans are for primary residences only. No vacation homes, rental properties, farms, or any other sort of non-primary residence.
The primary residence requirement states the borrower must personally occupy the home. Meaning, they must live in the home or intend to live in the home within a reasonable timeframe following closing. A reasonable timeframe is defined as 60 days from closing.
However, if a specific date of occupancy after closing is specified and future events make this date unattainable, the reasonable time may be extended. Typically, anything beyond 12 months will not be considered reasonable.
Don’t Miss: How To Get Vacation Packages Donated
Your Property Tax And Insurance Bills Could Be Higher
Vacation homes may also come with a higher property tax bill than a primary residence, Darnell says. He urges home buyers to make sure they understand the tax rates, which vary by state and locality, especially if theyre buying a home in a different state that they may not be as familiar with.
Along with different tax rates, there could be different rules and laws for real estate fees and expenses, Graziano says.
Closing costs, usually 2% to 7% of the homes purchase price, also vary, and some states have higher transfer taxes, the fee for passing a property title from one person to another.
Homeowners insurance could also be as much as 20% higher on a vacation home, especially if it is rented out.
Understanding Your Va Loan Entitlement
Your VA loan entitlement is a lifetime benefit. This means you can use your entitlement to buy or refinance a home many times over the course of your life. You’ll need to meet the eligibility standards to qualify for a VA loan. You will also need to meet Freedom Mortgage’s credit, income, and financial requirements to have your loan application approved.
Recommended Reading: Hicv Vacation Package Kissimmee Fl
Can I Buy Any Regular Home With A Va Loan Regardless Of Cost
If by regular home you mean a single-family home, townhouse or apartment, then yes. As far as cost goes, theres no limit to the cost of the home you can buy with your first VA loan. Technically speaking, theres no maximum loan amount you can take out with a VA loan.
As of January 1, 2020, VA-eligible borrowers can get any size loan with no down payment. There are no official loan limits. But remember, youll still have to demonstrate you can afford to make the mortgage payments.
So, if you are buying an eligible home, you can definitely use a VA loan.
Va Home Loans Cannot Be Used To Purchase:
- Property in a foreign country. Homes purchased using a VA Home Loan must be located in the United States, its territories, or possessions .
- A cooperatively owned apartment. Financing for these types of shared ownership properties expired in 2011.
- A farm. If purchasing a farm, there must be a residence on the property which the veteran will occupy.
- Vacant land. There must be immediate plans to build a home on the property, but new constructions come with their own set of financing red-tape with the VA Home Loan .
- Investment property or a second home. Remember that VA Home Loans are intended to help veterans and military find permanent housing second homes and investment property are considered surplus.
- A business loan.
Don’t Miss: Champions Gate Vacation Home Rentals
How To Buy A Second Home With The Va Loan The Bottom Line
The VA home loan is an incredible benefit, and you should definitely take advantage of itmore than once!
Using the VA loan to house hack is my personal favorite method for beginning your real estate investing journey, and I hope you will take advantage of it.
Yes, you can use the VA loan multiple times. There are stipulations surrounding your specific situation, but you CAN use the VA home loan more than once!
Get Todays Va Mortgage Rates
VA loans offer a lot of benefits as compared to conventional financing and FHAbacked loans. Via the VA, theres no down payment required, theres never any mortgage insurance to pay and underwriters allow for flexible qualification standards.
Get todays live mortgage rates now. Your social security number is not required to get started, and all quotes come with access to your live mortgage credit scores.
Recommended Reading: Vacation Rental Property Management Destin Fl
Reservists Are Eligible For Va Loans Too Who Qualifies
Reservists and National Guard members are eligible if they have at least 90 days active service after Aug. 2, 1990. That service can be under either Title 10 or Title 32, however under Title 32, the Guard member must have at least 30 days consecutive service.
Eligibility extends to members who have completed a total of 6 years in the Selected Reserves or National Guard and received an honorable discharge continue to serve in the Selected Reserves. Individuals who completed less than 6 years may be eligible if discharged for a service-connected disability.
For Borrowers Who Have Never Used A Va Loan Before
Those who have never used their VA mortgage loan benefits before but own property from a different type of mortgage loan transaction should know that the main issue with a potential VA mortgage in these circumstances is the intent to occupy.
A borrower who has never used VA loan entitlement has the full amount of their VA mortgage available to use, but not for non-residential properties, commercial enterprises featuring transient occupancy or short-term rentals fewer than 30 days. The house you buy or build with a VA mortgage must be your primary residence within 60 days of closing in most cases.
The occupancy issue applies no matter what kind of circumstance you find yourself in with a VA loan to purchase propertyyou cant buy a house you dont intend to live in as your main home. That does not mean you cant buy a multi-unit property and rent out the unused units, but the borrowers obligated on the mortgage are required to use the house they buy with a VA mortgage as their home.
You May Like: Holiday Inn Vacation Club Cancellation Policy
My Spouse And I Are Both Servicemembers Or Veterans And Are Eligible For Va Home Loans Can We Use One Of Our Loans To Purchase A Vacation Home Or A Rental Investment Property
No, you can’t. VA loans are only for a primary residence.
If two servicemembers each have a certificate of eligibility, a home you buy together still has to be one that you will use as your primary residence. That means that you cannot use your VA Home Loan benefit to buy a second home for investment purposes or for use as a vacation home.
If you already have a VA loan for a property used as your primary residence, it may be possible to use that home as a rental property and use your remaining eligibility to purchase another home for use as your primary residence. Before trying to use this option, though, it’s very important to consult your Regional VA Office for details and confirmation regarding your remaining eligibility.
The Specific Restrictions Of Using A Second Loan While Carrying A First Are:
- You cannot use your VA home loan guarantee for more than one outstanding loan at a time.
- You or your spouse must intend to occupy the second home a minimum of six months and one day of the year.
- You may or may not be required to sell, transfer or convey the original home purchased using the VA home loan benefit. You are allowed an exclusion to have your benefit restored on a one-time basis for a new VA loan.
To apply for a second VA home loan today, contact VA Home Loan Centers at !
Recommended Reading: Vacation Spots In Panama City Beach Florida
What Is My Entitlement
Your Entitlement is the amount of money the VA is willing to guarantee on your behalf to a private mortgage lender. The VA offers a basic entitlement of $36,000 to each Veteran. A lender is usually willing to loan you up to four times that amount or $144,000. If something happens and you are unable to pay back the loan, the VA will pay 25% of your loan to the lender as a guarantee. However, in many places across the country, its difficult to find a suitable home for $144,000. To ease this problem, the VA decided to link the amount it guarantees to the conforming loan limit for conventional financing as stated by the Federal Housing Agency . Doing that increased the amount available to veterans looking to buy a home. In most counties across the country, the VA will back 25% of your home loan, up to a maximum loan amount of $484,350 . In other words, if you finance a $250,000 home in a county with a limit of $484,350, you are only using a little over 50% of your entitlement.
The VA loan entitlement is yours for the duration of your life. It never expires, and you can use all of it or just some of it. You can even borrow more than the loan limit of $484,350, but most lenders will require some sort of down payment since the VA only backs 25% of the loan limit. Being able to use your benefit over and over is based on how much of your entitlement is available to you, and the reasons behind your wanting to use it again.