Get my va home loan back or not

6 Replies

Hello all ! My name is Logan Wray and I have some what of a  dilemma. I am brand new to real estate investing but I think I am ready to tackle my first deal. I have questions on how should finance it. My current home was purchased using the no money down va home loan. I'm wanting to make another purchase in the near future preferably a multi family unit, but I don't know if I should just save up for the 20% down payment on a new property or refinance my current home with a traditional 30yr note and then once again use my va home loan for the new property? Feed back would be greatly appreciated.

Ps. I would like to rent out my current single family home and "house hack" the newly acquired property.

Logan 

Hey Logan,

I am in a similar situation as you are; I just got my real estate license, but have been renting out my previous home which was financed via a VA home loan. I have had tenants in that house for a year (I bought another property via VA) and was also wondering whether I would want to refi or keep it as it is. To me, the bottom line became the interest rate; I have a good interest rate on my home as it is (a foreclosure purchased in 2009); it didn't make a ton of sense to me to refi to a full point and a half more (at this point, it is an investment property, not my primary residence) so I decided that I would leave it as it is and use traditional lending or private lending for future buy and hold properties. You can probably do the math over the life of an amortized loan to see which option makes more sense for you. Hope that helps; this is my first post :)

How much EQUITY have you gained since purchasing your primary (either through smart bargain buying in the first place, or subsequent appreciation)?

If there is no equity (yet), and you're champing at the bit to get into a multi (say, 4-plex), maybe you could apply for an FHA-approved low 3.5% deposit Loan?

But please, try to get as much INSTANT equity as possible from the outset. Then after another year, you can ask the same question again - no large deposit needed! Thank you for your service...

@Logan Wray how much is tied up in your first VA loan? You can have simultaneous VA loans if you still have remaining eligibility. If you have some eligibility remaining but not enough to finance the whole new property then you have to pay 25% of the excess in the form of a down payment. Using round numbers below for an example:

VA loan amount eligibility: $400k (this is how much the VA will guarantee for you)

1st house: $180k
2nd house: up to $220k with 0% down. This will use up the remainder of your $400k guarantee.

Let's say the second house (duplex in this case) costs $320k. You can still hold your own VA loan and do a VA loan on the new property.

2nd house: $320k sales price - $220k remaining eligibility = $100k excess. VA will require 25% down on any excess of your eligibility, in this case that is $25k cash. So you are now getting a $320k house with $25k down payment; a little less than 10%.

Check your county VA loan limit. This will let you know what your remaining eligibility is. Feel free to reach out if you have any questions. Long story short you can probably hold both on a VA loan, lock in the low interest rate on both properties, and save yourself the hassle of refinancing.

@Jay Brown , @Brent Coombs, and @Tyler Hodgson ,

Thanks for all the feedback! - Brent: I have around 20k in equity in my current home. I wasn't necessarily trying to pull any cash out of it though. I was under the impression that as long as I was under a "VA home loan" I had to occupy the residence until the house was sold or I paid off the note? This was my main reason to re fi. so I could hold the property and get into a new with zero down. - Jay, and Tyler: So from what you guys said I could take out a second VA loan on another property? What about the occupancy requirements? P.S I borrowed 200k for my first house with a va loan.

Given the very nature of your occupation, you can hardly be expected to promise to live in one home for the duration of its loan. I'm guessing that's also why you're NOT limited to just one VA Loan at a time (unlike FHA). [But, you'd be expected to space them out, like you are]. All the best...

Originally posted by @Brent Coombs :

Given the very nature of your occupation, you can hardly be expected to promise to live in one home for the duration of its loan. I'm guessing that's also why you're NOT limited to just one VA Loan at a time (unlike FHA). [But, you'd be expected to space them out, like you are]. All the best...

 Thank you sir! You as well and thanks for the advice.

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