Let's Talk VA Loans | ep. 38

What's up, guys? Welcome back to your Sunday Night Live, where we're going to be talking about everything you need to know about the VA Home Loan Benefit. The goal for tonight is to not only show you things about the VA loan that you maybe don't already know. The main goal is to answer whatever questions that you have about the VA loan. So, whatever questions you have, don't wait to a specific time in tonight's stream. Ask them in real time whenever they come to your mind. I would much rather answer your questions and make this more about what you guys want to talk about than what we want to talk about. So, drop your questions in the chat in real time, and I will do my best to answer them as we go through tonight's stream. I appreciate you guys being here and watching the channel. If you're not already subscribed, do me a favor. Subscribe and join the community because this channel was created to educate you, the veteran, about everything that you need to know about regarding the VA Home Loan Benefit. So, if you want to stay up to date about tips, tricks, hacks, and news, subscribe. This channel is created for you. What's up, guys? Welcome back, and thanks for hanging out with me tonight on this Wednesday night. If you aren't familiar, this is now our second week of doing these live streams on Wednesday night. In the past, we were doing them all on Sunday night. We did it for almost, jeez, I think we made it a little over six months doing them all on Sunday night. So, we switched them up, moving them to Wednesday at 5 p.m. Central Standard Time. And so, hopefully, this works better for more of you guys to be able to hang out and also get your questions answered. So, if you're new here, just remember this. The biggest thing for tonight is answering your questions. So, whatever your questions are about VA Home Loan Benefit, do me a favor. Throw them in the chat. Don't wait to a specific point. I'm going to try to do my best to answer your questions as they come up in real time. So, that way, you are getting the most out of what we're talking about tonight. This is more about what you guys want to talk about and less about what I have to show you that will be coming up on screen. So, I do have some slides just to get the conversation started and hopefully teach you something that you did not already know about the VA Home Loan Benefit. So, again, don't forget, drop those questions in the chat. Our topics for tonight that we are going to be covering are, first, the perks of using the VA loan, what the VA loan can be used for, what is VA loan eligibility, what are the VA loan requirements, and the last one is going to be how to build wealth with the VA Home Loan Benefit. This is one of my favorite topics to cover because a lot of Veterans only see the VA loan as a way for them to purchase one home or their only home with the VA Home Loan Benefit, when really, you can use it in a multitude of different ways. Some you may already know exist, and others you'll probably learn a little bit more about tonight, which we'll cover. Other than these five topics, I know I've already mentioned it once, but I'm going to mention it one more time. The sixth topic, I should say, that I want to answer or be focused on tonight is answering your questions. So, drop them in the chat, and I will get to them as we are going through tonight's stream. The perks of using the VA loan. There's going to be really a few main perks that I'd like to cover, and the first one is going to be 100% financing, no down payment. Now, you probably already knew that, and that is something that I would say is the most common thing people know about the VA loan. So, before you think, oh, really, I already knew that, here's what I want you to understand. The reason I also tried to bring this up is because there are some Veterans that do not know this exists, and there are also a lot more Veterans that maybe do know this exists, but they also confuse down payment with another thing called closing costs. Down payment and closing costs are actually two completely different things. They are not the same. Down payment is going to be a requirement in order for you to get a specific type of loan, maybe like a conventional loan or an FHA loan, but closing costs are going to be associated with all loans. So, that's something that you also want to make sure you understand when you're going through the home buying process, not because it makes it a negative, it's just more because you want to be aware of those things. Now, there are ways to get those closing costs covered in which I have done tons of videos on different strategies about that, but that's why I bring it up is because I think people need to understand the difference between down payment and closing costs. The second one is going to be no credit score. Did you know there is technically no credit score required on the VA loan? This is per the VA handbook or the VA guidelines, but the thing that you need to understand about this particular rule is even though the VA has that guideline in place, I don't want you to write that down or put it to memory because the VA is not the one that's actually going to do your loan. The VA only guarantees the loan, which means the VA has rules in place that lenders must follow in order for them to loan you the money to get that loan. But then what lenders can do with those rules that the VA puts in place is they can take those rules and they can actually make them stricter or more strict. I don't know what's the proper grammar there, but they can actually add rules on top of the VA guidelines. They can't make VA guidelines weaker, but they can make them stronger. Now, if your next question is why can they do that? Well, here's the simple reason. It's because they're about to loan you their money. They're not actually loaning you the VA's money. Lenders are loaning you their money. So if somebody says that you need to have a specific credit score in place, it doesn't necessarily make them a bad entity. You just need to also understand that the credit score that a lender may be telling you is going to be their credit score. That is not the VA's credit score. Some lenders have credit scores between 620, 640. I've even seen some as high as 660, depending on how much you're trying to borrow on a VA loan. But then there's other lenders like myself that are out there that focus on doing VA loans. So they have a little bit more of a lower barrier of entry. So like for myself, we can go as low as 580 as far as what our written guideline is. But I've actually helped veterans slightly below that as low as 542 credit score be able to still purchase a house with a VA loan. And that was through what's called a manual underwrite. Now, I've done a couple of videos talking about VA credit scores and also manual underwrites that are linked down below in the description and also on the channel. So if you are finding yourself in that situation, check out those videos because it'll give you a better understanding of how to navigate that particular process. The next part that we're going to also cover is going to be debt to income ratio. Debt to income ratio is a very common question that I also get around VA loans. They ask me, what is the debt to income ratio on a VA loan? And I also tell them this other thing here. There is not a specific debt to income ratio that the VA uses to scrutinize whether or not you can or cannot get a VA loan. But as I just told you, with credit scores, if a lender has a debt to income ratio applied with their particular guidelines, then you're going to have to meet that debt to income ratio in order to get a loan. Now, what is debt to income ratio? This is going to be simply a calculation based off of how much money that you have coming in versus how much money that you have coming out in a percentage form. So if you make $10,000 a month in household income and all of your debt is $5,000 a month, then you have a 50% debt to income ratio. Now, why this is also important to understand is because there are a lot of lenders out there like myself that use residual income to determine your ability to qualify. And residual income is the VA's rule around their own form of debt to income. It's just qualified or looked at differently. For example, VA puts in place how much money you need to have left over after all of your bills are paid. What they first look at is where you're located geographically. Then they're going to look at your household size, and then they're going to say how much money you need to have left over for your overall monthly obligations. So there are many situations where I have seen veterans have a 65 to even 70% debt to income ratio still be able to qualify for a home. And that's because the VA does not use debt to income ratio to make the final decision in terms of your ability to qualify for that particular loan. So this could actually be a huge game changer in terms of the barrier of entry for veterans to be able to achieve homeownership. And then our last perk is going to be no private mortgage insurance. Private mortgage insurance is a premium that people have to pay if they are getting an FHA loan or if they are getting a conventional loan and the down payment is less than 20%. Private mortgage insurance actually does not protect the home buyer at all. It is actually only there to protect the lender. So the person that is getting that loan is going to have private mortgage insurance essentially just in case that person actually forecloses or defaults on that loan. It does not pay their home down faster. It does not help them build any equity. It technically is only there to protect the lender. Whereas on VA loans, you actually do not have to worry about ever having private mortgage insurance no matter whether you're using your loan for the first time, second time, 10th time. It does not matter what type of VA loan you're doing. There is never private mortgage insurance on a VA home loan benefit. If you're hanging out with me tonight, first, thank you for being here. Second, if you have a question, do me a favor, throw it in the chat. I want to answer it for you tonight and make this worth your time. So let's talk about property types that you can use your VA loan for. The first one and the most common one is going to be single family homes. Everyone kind of already knows that and that's also why I have put it off by itself is because there are several other ways a VA loan can be used in terms of the types of property that you can buy. Some other things that you can use the VA loan for is going to be purchasing a condo or maybe you want to purchase a townhome. But the thing that you want to understand when you're purchasing a condo or a townhome is going to be the VA's requirements. The VA has rules applied really to actually all types of VA loans, no matter what type of property you buy. These are called minimum property requirements and they are outlined in their guidelines. Now, when it comes to condos and townhomes, the VA has a list of all the homeowners associations that are going to be already approved. And there are many situations where I have seen veterans who are not working with a VA knowledgeable lender and are not working with a VA knowledgeable realtor to help them go through their home buying journey. So you want to make sure you're doing that because this is also going to save you a lot of time. Another way, another property that you can use your VA loan for is going to be manufactured properties. Maybe you're looking at purchasing a property that was not at some point fixed to a permanent foundation and now it is. It could have been a mobile home. It could have been a prefab home, a modular home. Again, anything that was not at one point fixed to a permanent foundation, but now is, is technically considered a manufactured home as long as it has all of the engineer certs and all of the documentation to support that. Another thing you can do is buy a multifamily property. If you want to buy a duplex, triplex, quadplex, anything between two to four total units, you can do that. The VA just requires that you must live in one of those units and occupies your primary residence. And then you can use the remaining units as rental income to help offset your mortgage payment. This is a very powerful strategy for veterans who want to be able or are looking to build wealth with the VA home loan benefit, which we're also going to talk more about later on tonight. And then the next one is going to be buying a new build. New build is going to be you going to like a local builder in your area. They have purchased a large parcel of land and then they're going to subdivide it into smaller parcels. And then you're just going to purchase one of those. They already have designs already picked out for you and they give you kind of a couple of different options. That's going to be a new build. But the other thing you can do is use it for a custom construction. Custom construction is going to be exactly how it sounds. You are picking out everything. You can use your VA loan to build a custom home. A lot of lenders say you can't do this. You can do it. Now, will everyone qualify to do it? Not necessarily, but that same rule goes for actually all different forms of these other properties we're talking about as well. But you can use your VA loan to not only build a custom home, but also finance the land as well, all in one loan. So it's a very powerful strategy there for those of you that are in the position where now you're ready to build your forever home or your dream home. And you want to, A, buy land that you don't already own and finance the construction. Or, B, maybe you already own the land and now you're just trying to figure out how you're going to finance that construction. You can do that with the VA Home Loan Benefit. I'm going to jump over to a question here. And while I'm doing that, if anyone else has other questions, drop them in the chat. I want to answer those for you guys as well. So my name is Ramon. My wife is Christine. We didn't know all this before. We own a VA loan. We own a VA home and a VA loan. Now we are learning about being able to buy another home. We need help. I'm happy to help, guys. We would like to figure out about buying a rental property or another family home. We need someone who knows about VA loans. Yeah, I'm happy to help. If you go to the website linked above here, there is a Next Steps form. You can actually click that link or not click that. But if you type that into your browser and go to the Next Steps form on my website, I can connect you with somebody on my team. I can help you with that. All we really do is VA loans. So I can happily help you guys out with that. I am going to be talking a lot more about using the VA loan to build wealth and some strategies around that tonight as well. So stick around for that. I am going to dive into that for you guys more on that particular topic because it does get a little complex. But I don't want to, obviously, I'm going to simplify it is what I'm saying. I don't want to overcomplicate it for you guys. So for sure. And so let's talk about VA eligibility. VA eligibility is going to look something like this. This is what a veteran's my phone's going off. Let me put my stuff on. Do not disturb here. VA eligibility is going to be where you have a certificate eligibility here. And that's what it looks like if you have no existing VA loans. Now, when you go to this lower section, there's going to be a paragraph on every veteran certificate eligibility that states that red line that's that's underlined right there. The VA is guaranteeing 25% of the Freddie Mac conforming loan limit. Why is this important? Well, this is actually what makes the VA loan so powerful. This is why your VA loan has no down payment. This is also why your VA loan has no private mortgage insurance. What the VA is doing is they are putting themselves on the hook and guaranteeing 25% of your loan in the event that you default or foreclose on that loan. And if they don't default on foreclosed, they don't get that money back. We're in this situation on a VA loan. VA is guaranteeing that money on day one all the way to year 30. Right. So this is another thing that sets the VA loan apart from other loans. They are guaranteeing 25% of your loan. This is, again, why you don't have private mortgage insurance and also why you do not have a down payment requirement. Now, the next thing we need to talk about when it comes to VA eligibility is going to be loan limits. There is a lot of misunderstanding and misconceptions around this particular topic. So pay attention to this part right here, because this is actually going to help those of you that maybe are trying to understand using the VA loan for the first time and also using the VA loan for the second, third, fourth or however many times. When it comes to loan limits, there's two forms of entitlement. The first form of entitlement is going to be basic entitlement. This is going to be a veteran who has no active VA loans whatsoever, kind of like that certificate eligibility that I showed you earlier. That is going to be basic entitlement whenever a veteran has no active VA loans. But when it comes to your excuse me, I skipped over something, but that's what that eligibility looks like there. There is no active VA loans. But here's the other thing that you need to understand. In 2020, Congress passed that if a veteran has no active VA loans or 100 percent of their entitlement in place, that veteran can now borrow up to whatever they can income and credit qualify for. So if a veteran wants to be able to purchase a $2 million, $3 million or even $4 million property with the VA home loan benefit, a veteran can technically use the VA loan. So this is a very powerful strategy here for veterans who are just simply wanting to be able to buy maybe a luxury property, especially if they can actually afford it. But when it comes to the veteran who is looking to use the VA loan for the second, third or fourth time, and they're not planning on getting rid of the first property, this is going to be called bonus entitlement. And bonus entitlement is going to depend on the county loan limit in the place that they are purchasing the next property. And then we have to look at the county loan limit or excuse me, and then we have to look at the loan that they had for the existing property. So I'll talk a little bit more about that later. But when it comes to bonus entitlement, this is what we need to look at is this county loan limit map right here. And what you're going to notice on this map is majority of it is in gray. Some of it is in yellow, light orange and dark orange, but the majority of the country is in gray, which I would even say if I were to guess a percentage, you're talking about maybe over 95 plus percent of the country is in gray. So what do you mean by this, Josh? But these things change every single year. As of twenty twenty four, I said it was seven sixty six five fifty. But what was it last year? Well, last year in twenty twenty three, the county loan limit was seven twenty six, which means that's a forty thousand dollar difference. If you go back one more year, we saw we saw another big jump in in twenty twenty two. It was five hundred and forty seven. So if you go from twenty twenty two, which was five forty seven to twenty twenty four, which is seven sixty six, that's over one hundred and twenty thousand dollar difference in terms of how much more entitlement became available for a veteran. But when they're planning for the second property, what they're doing is they're using the current county loan limit because you don't know what it's going to be next year yet. You don't actually find out what next year's county loan limit will be until about 30 days before the year starts. So, for example, twenty twenty five, we don't know what the actual limits will be until right around I would say a little after Thanksgiving is when they actually get announced each year. So this is something to also pay attention to when it comes to your goal of having multiple properties at the same time with the VA loan is what is the current county loan limit? But what could it potentially become? Because as I just showed you, if you bought a house two years ago, you now have significantly more entitlement now than you would have two years ago. So who can use the VA loan? Well, anyone who served on active duty, that could be 90 days during wartime or 181 days during peacetime. But it also could be somebody who is in the reserve or National Guard. There's actually a lot of people who are or were in the reserve and guard and do not really actually even know that they are eligible. And that is simply because when it comes to reserve and guard, there's a little bit more rules around this. First is going to be you have to have completed at least six years of service. You could have received an honorable discharge after that six years. You could have been placed on a retirement list, transferred to other honorable service, or you're still currently serving. But six years is the minimum requirement. Having completed all the weekends and the the total points that are required to to actually be eligible. But there are some veterans who actually have become eligible within six years. And this is going to be a reserve or National Guard member who has been on Title 10 orders for something other than school or training. Title 10 is going to be similar to a deployment. Maybe you served for three years and then you went on a deployment, came back from that deployment. You could be eligible for the VA loan. Title 32 orders is going to be somebody who is under state activation or federal activation within their state, but maybe are just for state assistance. For example, right now, I live in the state of Texas. There's a lot of the Texas National Guard has been activated to help support the border. In 2020, I was living in Hawaii. At that point in Hawaii, in 2020, we had a little thing happen called a pandemic. And during that pandemic, there was a lot of National Guard members that were under federal activation to support the state. And there was a lot of veterans who became eligible for the VA loan, even though they had not been serving for six years. So keep that in mind, because you may yourself be eligible now or maybe, you know, somebody that actually is eligible themselves. So who else is eligible for the VA loan? Well, someone who has been discharged for a service-connected disability, a spouse of a prisoner of war or missing in action, or an unremarried spouse of a veteran who has passed away due to a service-connected disability. This is known as what's called this is what's known as a surviving spouse. There's actually a lot of surviving spouses out there who do not know they're eligible. And what they thought was when the fortunate situation happened, when their spouse maybe passed away, they're having the spouse pass away. A lot of them thought that the benefits unfortunately passed away with the veteran. And in many situations, that's not the case. It's just got to be as long as the veteran passed away due to a service-connected disability, the spouse could actually inherit to the home benefit and have the ability to use it with the same parameters that we've been talking about tonight. Those of you guys that have been hanging out with me tonight, again, I just want to also remind you guys, first and foremost, thank you for being here. But second, if you haven't already, drop a question in the chat. I want to answer a question for you guys and really make this worth your time. So drop whatever questions that you have in the chat for me, and I will do my best to get to all these questions for you guys. All right. So who can be on the VA loan? Well, obviously, you know, the veteran and the veteran spouse can be on the VA loan, but it also can be two veterans that are either married or not married. I've seen that happen. I've seen two veterans that maybe you have two guys that are on active duty. They want to become roommates and they want to split the mortgage and buy a property together. I've seen two veterans where it's father son both served and they want to buy a property together. And I've also seen two veterans where they are married husband wife and they want to buy a property together as well. The one situation that you don't see on here is going to be a veteran and a non-veteran and they are unmarried. This situation is completely different from the other parameters. When it is a veteran and a non-veteran and they are unmarried, the VA requires a 12 and a half percent down payment in order for the veteran to be able to get that loan. Now, why does the VA have this requirement? Well, what the VA is now saying is that if there is a veteran and a non-veteran and they are unmarried, we're not going to guarantee 25 percent of the loan anymore. We are only going to guarantee half, which would be the veterans half. Hence why there is a 12 and a half percent down payment. That's what that would be there for. But that is the only situation where there is kind of a rule like that. The next thing I want to talk to you all about is funding fees. I'm going to go quickly through this, but funding fees are in place on all VA loans for a veteran that is using the loan for the first time or a subsequent time, which is anything more than the first time. When it comes to first time use, it's 2.15 percent. And when it comes to subsequent use, it's 3.3 percent. But keep in mind, they will cut you a little bit of a break if you decide to put a down payment. Now, the down payment is not required, but the down payment does help lower the funding fee if you decide to do it. Now, why the funding fee exists is simply because this is what funds the program. We talked about earlier how the VA is guaranteeing 25 percent of the loan. So the VA funding fee is actually what funds the program so that it doesn't come back on taxpayers. This is what keeps the VA loan so amazing. This is what keeps it going. This is what allows the program to be so awesome because the VA, again, is putting themselves on the hook for 25 percent of your loan. So how they come up with that money is the VA funding fee. Now, how is the funding fee paid, though? The funding fee is not paid up front, which technically it can be. It's just not required. The funding fee is actually paid through the loan. You actually roll it into the loan, and it just increases the monthly payment very slightly. So that way, the program, one, continues to be funded, and two, so that way the veteran does not have to have up front costs in order to do it. Now, after funding fees, we want to talk about who's exempt from the funding fee. Well, there are those of you that are exempt from the VA funding fee, and those could be those of you that are collecting via disability of a 10 percent rating or more. A surviving spouse, a Purple Heart recipient, a service member who received a proposed rating prior to the closure of their loan, and some of you guys could even get funding fees refunded. So there's actually a lot of people who are exempt from the funding fee, which means you do not have to pay it on a VA loan ever, whether you're using it for the first, second, third, tenth. It does not matter. As long as if you're exempt, you're exempt from it completely. Another powerful strategy that you can use your VA home loan benefit for is going to be the streamlined refinance. This is one of the coolest things that you can do if you have an active VA loan right now. A streamlined refinance is also known as an EARL, and I'm not talking about Uncle Earl. I'm talking about EARL as an acronym, Interest Rate Reduction Refinance Loan. This is where you're going to essentially refinance a VA loan to another VA loan to simply lower your rate and monthly payment. There is a lot of veterans that are doing this right now in this current market. If they purchase a property, I would say within the last about two years or so, or really anyone that has an interest rate higher than I would say maybe 6% is in a really good position to streamline refinance. This allows you to do this without having to have any income verification. There's no asset verification. There is no appraisal on the property. All you have to do is make sure that you have been making your mortgage payment on time for the last 12 months. If you have not had the property for 12 months, that's okay. You just have to have been making payments for at least the last 210 days. And then what the VA is also going to look for is making sure that your new interest rate is at least a half a percent lower than your current interest rate. So if your interest rate is 6% right now, what the VA is looking for is that your new interest rate is at least 5.5 or less. So that's one of the biggest rules around streamlining refinances. Now, personally, I do like to see it to be a little bit more than a half a point difference to really make it make sense. I have a video coming out later on this week that that is going to talk strictly about streamlining refinances. For those of you, if you are interested in that, because a lot of people that are doing it right now and there's a lot of misconceptions about around it. And I think a lot of people are actually making a lot of mistakes when doing it by listening to bad advice. So I'm definitely going to be talking about that in an upcoming video. Hi, I came. Thanks for all the information. Thank you for being here. I appreciate it. If you have any questions for me, throw them in this chat. I want to answer them for you and really make this worth your time. So I appreciate you being here. Another way you can refinance your VA loan is going to be the cash out refinance. The cash out refinance is a very powerful strategy as well, because you can actually use the VA loan to pull out equity. So let's say you have a property that's worth 500,000 and you sorry, you have a property worth 500,000, but you only owe 300,000. You have about $200,000 in untapped equity there. So if you wanted to, you can do a VA cash out refinance to pull out some of that equity. And why you would pull it out is for a few reasons. I've seen veterans use it to pay off debt. Sometimes paying off all of your monthly liabilities and having it all in one loan is significantly cheaper than paying them all separately. I've seen veterans pull out that equity to start a business. I've seen them pull it out to buy a whole other house in cash. One of the biggest situations I saw was I had a veteran reach out to me and said, hey, I have a VA loan. I've actually never used it. Can I give it to my daughter? I said, well, unfortunately, unless you're going to live in the property with your daughter, you wouldn't be able to do that. But he said he owns a house. And I said, OK, cool. Tell me, tell me this. How much is your house worth? And this was actually at the time I was living in Hawaii. And he said it's last time I checked, it was worth about a million dollars. I said, cool. I said, well, how much do you owe on that property? He said about $100,000. OK, well, simple math tells me you have $800,000 to $900,000 in equity in that house. I said what I would recommend that you do instead of trying to give the VA loan to your daughter because you won't be able to do that due to VA's occupancy requirements. What you could do is do a cash out refinance on the property that you already own and you already are living in. You can pull out that equity, go buy a house in cash for your daughter, and then just make her make your mortgage payments. And the whole reason he was doing that for his daughter is because his daughter was obviously married, had their own kids and had their own family. So he's like, I don't want to go live with my daughter. I'd rather have her have her own mortgage. So that's exactly what he did. It made more sense for him to do that. And now he had two homes in one mortgage with a significantly less payment than he would have had by doing it in a different way. So that's some other ways the cash out refinance can be done or be used. The unfortunate thing about cash out refinances is if you live in the amazing state of Texas, like I do, cash out refinances are not possible in the state of Texas. If you're in all the other 49 states, you can use the cash out refinance. If you haven't already, do me a favor, subscribe, join the community. Let me know in the comments what you want me to talk more about. I try to make content around what you guys want to learn. So that way you're making getting the most out of your time here on this channel. So if you haven't already, do me a favor, subscribe and join this community. I would appreciate it. All right, let's jump over to a question. Could I finance a pool into my first day alone in Minnesota? Thank you. If you're trying to finance a pool into it where it's a good question, by the way, if you're trying to do it into where you like you see a property on like 123 Main Street, you want to buy that property and try to finance the pool. No, they won't allow you to do that. But if you are trying to build a custom home, you can do that because the finance, sorry, the costs of all that's being built are in the overall build plans. So I have a video talking about VA one time close or VA construction loans. You can do it in that route, but not with buying an existing property. You won't be able to do that. Now, what if you already own a property? Kind of like what we just talked about, the VA cash out refinance. You already own the property. You have equity there. That's actually another great example as to what you can use the cash out refinance for is maybe you want to pull out that equity to finance a pool. That's unfortunately not going to be possible there. But thank you. Thank you for that. I appreciate that. I'm going to dive into some wealth building strategies with the VA home loan benefit. And while I do, if y'all have more questions, throw them in the chat, because I want to get to those questions as we're going through this wealth building segment, because this is one of my favorite things to talk about. If you're if you don't already know that is some wealth building strategies with the VA home loan benefit. So one of the some of the simplest ways or simplest wealth building strategies when it comes to the VA loan is first going to be house hacking. House hacking is essentially where you're going to live in one unit or one room of that property, and you're going to rent out the remaining units or rooms to help offset your mortgage payment. So, for example, if you live in a multiunit property, let's say a duplex, triplex or a quadplex, anything between two to four units, you're going to live in one of those units, rent out the remaining units to help offset your mortgage payment. The VA will definitely allow that. That's a very great wealth building strategy. Some other things you could do is buying a single family home with a detached suite. or an in-law suite. Those are all essentially the same thing is what a detached suite actually is. But what you could do is live in the home, rent out the suite. I've seen people live in the suite, rent out the home. Those are some things you can use the VA loan for. You can also buy a home and rent out the remaining rooms. I once had a veteran specifically, I remember, where she bought a three-bedroom house, decided that she was going to live in. She was on active duty and decided she was going to live in the primary bedroom. She rented out the two remaining bedrooms to fellow airmen. And then now at the end of one year, decided she was going to rent out the bedroom that she was living in. So now she has three separate tenants occupying her three-bedroom house. And then she went to use the VA loan again. Very powerful strategy. But what she started off doing all this with is just simply house hacking. A really great strategy to get started with building wealth with the VA Home Loan Benefit. The thing you just need to understand when it comes to owning multiple properties with the VA loan is the VA has a requirement around occupancy. And that is you must intend to occupy the property as your primary residence for one year. At the end of that one year, you can do what you want. You convert it to a rental if you want to. You can sell the house. I mean, you can sell the house in less than a year if you want. But essentially, the VA's biggest requirement here is are you intending to occupy it as your primary residence for one year? Now, personally, I don't recommend that. I do not recommend to veterans that come to me and they reach out and say, hey, Josh, I'm going to try to buy a house, live in it for a year and rent it out. It's not that I'm against it and saying this is a completely bad strategy. I just don't think it's the best plan. Because what people, I think, forget is that sometimes plans change. Right. I'm going to cash out my equity. I can use that money for something else. What's the problem here, Josh? Well, here's the problem. If you live in a property for two out of the last five years, you don't have to own it for five years. You just have to live in a property for two out of the last five years. You are exempt from capital gains taxes on whatever you make on that property up to two hundred and fifty thousand dollars if you are single or five hundred thousand dollars if you are married filing jointly. So essentially what I'm showing you is also how to understand your tax benefits when it comes to homeownership. So if you live in a property for two out of the last five years, it gives you a lot more options. So if your plan is to own a property and then rent it out in a short period of time, that's perfectly fine. I just personally recommend people do it after two years versus doing it after one year simply for that tax benefit as well. And also what it also gives you is the ability to make more money in the long term when it becomes available in rent. Because typically homes in when it comes to the rental market, if you look at a home for sale, that's a three bedroom, two bathroom. When you look at a home for rent, that's a three bedroom, two bathroom. Typically, the rental market trails the mortgage market. So what I mean by that is whatever your mortgage payment would be on that property on the day that you're buying that property, the rent for that property is typically going to be slightly lower than that. It doesn't make it a bad buy. It's just something that you want to understand. Because first, are you going to rent it out on day one? No. So it doesn't necessarily matter so much what it is right here, but what it is going to be in a year or two years. Rents on average have been rising around 5% year over year. So over time, that rental amount is going to continue to catch up. So in about two years, you could actually see yourself making more money in rental income for that property versus waiting one year. So that's another reason why I say that as well. Here's a COE for a veteran that has one certificate, excuse me, one VA loan on a certificate eligibility. And he reached out to me and said, Josh, I am ready to buy a second property with my VA loan. So do you remember earlier I talked about county loan limits and I had to show you guys kind of how those work there? This is exactly what we had to do. We had to look at the county loan limit in the place that he was living in, which was $766,550. And then what we had to do is subtract the amount of entitlement that he had charged on his certificate eligibility, which led to the total amount remaining of $445,000. This veteran had $445,000 remaining to use for his second VA loan. But here's another one. This veteran has two VA loans at the same time and reached out and said, hey, I'm ready to actually get my third property with the VA loan. What are my options? Well, same rules apply. We pulled the county loan limit and then we calculated the entitlement charge and that came out to $336,000 remaining for his third VA loan. Now, before I show you a veteran that has several VA loans, I want to show you guys this one more time. I just showed you guys a second ago that the VA's requirement is that you must intend to occupy the property as your primary residence for one year. But here's the thing. This is a veteran that I helped buy all three of these properties with his VA home loan benefit. And what you'll notice on here is if you see the date of the loan, you'll notice that he owns two properties that he purchased in basically six months. How did he pull that off? Well, the way he pulled that off was actually because the rule states you must intend to occupy. And the reason why it says you must intend to occupy is because when you sign on the dotted line of that loan, what the VA is essentially asking is, what is your intention for the next one year of that property? And when he signed on the dotted line on July 23rd of 2021, his intention was to live in the property that he bought for one year. But what happened is two weeks after he bought that property, Uncle Sam said, we are PCSing you to a new duty station. And I'm pretty sure he couldn't go back to Uncle Sam and say, hey, hey, big army, I'm not going to be able to PCS because I just bought a house. They're going to say that's a good one. So what happened is his orders supersede the mortgage, which means that he was able to rent out the property immediately and buy another property at his next duty station, which is exactly what he did. And that's how he closed on that property in October. Now, if you're not on active duty, you're probably thinking, well, I'm not on active duty, but I've had life events happen to me. How can I use my VA loan multiple times? Well, you can as well. I've had veterans who receive a job offer in a whole new state six months after they bought the first property. That's another way that you can also do that, because when you bought the house, you didn't know that you were going to get that job offer six months later, making more money and probably being closer to family. I've had veterans move due to family members becoming ill, moving across town even or across state lines and just wanting to be closer to a family member who was ill and they were going to be caring for them and they had just bought a property. Those are all situations where you could actually be eligible to use the VA loan again in less than 12 months. The biggest thing was, like I told you earlier, what was your intention when you signed on the dotted line for that property? Was your intention to rent it out immediately or was your intention to occupy? If your intention was to occupy, then that's the biggest thing the VA is looking for there. And you said, Josh, that's not enough. In my market, I need more than that. Or maybe you're just saying, based on my household size and how much the home is for how many bedrooms we need, it's going to be more than $445,000. You can hire it out, hire a property manager. Yes, they are taking a little bit of a cut, but you get what you pay for because you're actually working with a professional whose job is every single day to manage property. I'm going to jump over some questions. If you guys have any more questions for me, throw them in the chat. I'm going to get to these other questions that are already here and make this worth your time. These new laws, how would it benefit the buyers? I think it actually hurts us. Am I wrong? Great question. I think it can hurt you by having bad representation, but I do think it can actually help.