VA Loan occupancy requirements

8 Replies

Is anybody familiar with the occupancy requirements associated with VA loans? From my research I've gathered that it has to be a "primary residence" and you must occupy within 60 days of closing (up to 12 months under certain exceptions).

I've heard that if you PCS (transfer to a new duty station) you can take out another VA loan on a new property while maintaining the former as a rental property. Can anybody confirm this? or is the entirety of the VA entitlement "attached" to one property at a time?

Oops didn't realize I put this in the starting out forum. Is there a way to move it to a more appropriate forum?

@Account Closed has turned multiple primary residences into rental properties and may be a good source of information for you.  Good luck and again welcome to the site!

@Jacob Elbe Thanks for the reply. That definitely supports what I've heard from others as far as an eligibility around $400K and the ability to use it again after a PCS but I couldn't find that stated any where in VA Lenders Handbook (VA Pamphlet 26-7). Is there any risk associated with this as far as adverse actions the VA or the lender can take?

Also I wonder if it requires a PCS to be able to use another part of the entitlement or if you can use the remainder of the entitlement in the same city as the first for another "primary residence" after meeting some minimum time requirement in the first.

That's a good question, and unfortunately one I can't answer. If no VA lenders jump in here, just call and ask. If you figure it out, put in up in a forum post though because I'm sure it's a question I'll want answered in the future!

@Jacob Elbe  

Thank you for the shout out!

Yes we have bought 2 houses with VA loans. You can buy as many houses you want as long as you don't exceed the VA allowance amount. It has been a great opportunity for us!

I have alot of articles on my blog in my signature. Our transient career has been a huge bonus for us. We have been able to turn that one into a positive. :)

@Elizabeth Colegrove 

Was your second VA loan house purchased following a PCS? Do you guys do a 0% down payment when you buy or does that raise the mortgage payment too high to see profits when you convert it to a rental?

I'll be sure to check out your blog! I'm especially interested to see how you self-manage from a distance.

@Account Closed  

Yes we bought both of them because of a PCS. We did really well putting 0% down. While they certainly don't meet the 1%, 2% or 50% rule. They still cash flow awesome, by covering their expenses, appreciating and getting us a long term cash flow. Our goal is to combine personals turned rentals and pure rentals into a cash flow for early retirement. 

Originally posted by @Account Closed :

@Jacob Elbe Thanks for the reply. That definitely supports what I've heard from others as far as an eligibility around $400K and the ability to use it again after a PCS but I couldn't find that stated any where in VA Lenders Handbook (VA Pamphlet 26-7). Is there any risk associated with this as far as adverse actions the VA or the lender can take?

Also I wonder if it requires a PCS to be able to use another part of the entitlement or if you can use the remainder of the entitlement in the same city as the first for another "primary residence" after meeting some minimum time requirement in the first

@Elizabeth Colegrove does this strategy only apply to PCSing? 

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