The VA Home Loan in my opinion is the best loan available for eligible veterans and their families. However, it does come with some pretty significant rules when it comes to occupying the property and who can occupy it.
In this video we will explore the VA rule that dictates the requirements for occupancy when utilizing your VA home loan benefits. Simply put, it outlines who can live in the property purchased with a VA loan and under what circumstances. Understanding and adhering to these guidelines can help borrowers navigate the VA loan process smoothly and avoid potential issues ahead of time.
In this video, we'll cover:
What is the VA Occupancy Rule and why is it important? Who is eligible to meet the occupancy requirements? Primary residence vs. secondary residence: Clarifying the distinction. Exceptions to the rule: Temporary duty assignments, deployments, and other scenarios. Consequences of non-compliance with the VA Occupancy Rule.
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VA occupancy, what are the rules? What's allowed? What's not allowed? Hey, everybody, welcome back.
If you haven't already, give us a like and subscribe so we can keep great information
coming out to those who need it. So today we're going to talk about VA home loans and the occupancy
requirements. Now, VA home loans are an owner-occupied loan, plain and simple. What does
that mean? Well, that means you can't use your VA loan and purposely buy a second home or buy it as
an investment property. It doesn't mean that eventually you can't turn that home into a
second home or an investment property and rent it out. It just means that your initial intent is you
have to occupy that home. Now, there are some caveats that we're going to go over through this
video that do have some leeway with that that we're going to explain. So the biggest thing is
VA wants you to be able to occupy that residence within 60 days of funding the loan. That means
you're signing your paperwork, the loan funded and closed. They want you to be occupying that
home within 60 days after closing. Now, there are some things with that. For example, if you're an
active duty serviceman or woman and you're deployed, how does that work? Well, we can do a couple
things. If you are married, your spouse can actually fulfill that occupancy requirement
for you. Or we can even have a legal dependent, a child, fulfill that as well too. We just have
to document it, show that you're currently deployed, when your orders are expected to end, and not a
problem. We can move forward with that. Now, what about if you're already out of the service? That's
another thing too. You might have a job that's a distance away that requires you to travel
or something of that nature. That's okay. Your spouse can actually fulfill that occupancy
requirement for you as well. That's not a big deal. If you are getting out of the service and you're
about to retire, VA will allow you to occupy that property within 12 months of retirement. Now,
it's the intent, okay? Everybody understands that things happen. So, if we do a VA loan for you, we
close on that loan, and you're living in the house, and all of a sudden, four months later,
you call me up and you're like, Aaron, I got a job offer to move across country. I can't turn
it down. It's a once-in-a-lifetime opportunity. VA doesn't have a problem with that. Again, it's just
documenting the file, being able to show the documentation of what that is. That's not an issue.
Again, the VA just wants to make sure that your intent is to occupy that home, plain and simple.
So, let's look at some examples of what that might be. So, let's say you are an airline pilot, and
you want to buy this house, but about half the time, you're living in hotels or doing something
of that nature. As long as we can show, and your employer is willing to write something on company
letterhead that, hey, you can work from this location, or etc., etc., or if you're a remote
worker, you can work remotely, that's not an issue. VA has no problems with that. Now, there are some
things I want to go into where a lot of confusion arises with, hey, Aaron, I want to buy a duplex,
or I want to buy a triplex, or I want to buy a fourplex with that. That is completely fine.
VA will allow us to land on anywhere from up to one to four units. So, if it's a fourplex,
they want you to occupy one of those units for at least a year. After that year, you can move out,
keep your VA loan on that property, and rent it out. Again, guys, it's all about the initial
occupancy. Now, if you're going to sit there and do that, and go to a new property and do that,
you are allowed to do that. However, you got to remember that we discussed in some other videos
that that's why it's so important that we have your certificate of eligibility, because it's
going to tell us how much entitlement was used, and how much basic entitlement was used up,
how much bonus entitlement you left over. So, in circumstances like that, depending on where
you're at in the country, and how much your loan amount is, it might make sense to now refinance
that original VA loan into a conventional loan, so it frees up your complete occupancy with that.
So, guys, the biggest thing with occupancy is VA just wants to make sure you're using the VA
for what the true spirit is, and that is an owner-occupied home to live in. Now, if it was
me doing it all over again, one of the first things I would do, and this is one of the things
I coach all my clients, your first home is very, very rarely ever your dream home. I would absolutely
buy a multifamily if I could, live in it for a year or two, you get to help use those rents to
help qualify for the mortgage, and you move on. Before you know it, you've got a nice investment
portfolio started. However, again, just so we're clear, on a VA home loan, if you're buying a
multifamily unit, you have to occupy one of those units first. And again, VA does have some leeway
with that. So, if you're buying a fourplex, and all of a sudden you're having a PCS six months
later, you get orders cut to do something, VA doesn't have a problem with that. Again, guys,
it's just documentation, documentation. So, please don't, because they will find out, we will find
out, please don't try and use your VA loan benefits to buy just a straight second home or an investment
property. Again, everything's about documentation nowadays, so if you tell me something, we have to
be able to prove it. Hey, guys, I hope this was helpful. If you found this video helpful, please
give us a like and subscribe, and please feel free to share this video with someone else who may need
it. As always, guys, if you have any questions, we lend in all 50 states, give me a comment down below,
reach out, we're happy to talk, it doesn't cost a penny to talk. Thanks for watching,
have a great day, we'll talk to you soon.
