VA Loan and Second Tier Entitlement
Hi Samantha,
I have read some of your post explaining VA Entitlement and you have done a great job clarifying some of the quirks that go along with VA loans. I do have some additional questions if you get the time to answer that would be wonderful.
I own a home that I bought using my VA home loan. The cost was $148,000 so I know I have $269,000 remaining in my second tier entitlement (Kansas City.) I plan on renting out my current home.
If I have this correct; once I have my home rented with a rental agreement for at least twelve months and a deposit check, this will offset the mortgage payment in the lenders eyes? Do I need to rent is out for a set amount of time before using my second tier entitlement?
Do I still need cash reserves if it’s rented? Also, I believe I cannot consider the income from the rented home for at least two years for future loans? This would be fine in my situation I just want the rental income to offset my current mortgage.
I plan on purchasing a duplex, triplex, or a quadplex with my second tier entitlement shortly after renting my house out. I know the minimum loan amount needs to be $144,001, but no more than $269,000 per my remaining eligibility, any amount over $269,000 I would be required to put a 25% down payment on. I also know I need to reside in the residence for the time set by the lender, not the VA.
I didn't have to pay the VA funding fee because of a service disconnected disability, would I need to pay it if I use my second tier entitlement? Are there any other addition fees with the second tier that aren't associated with the first?
Furthermore, do I need to have good reason to use my second tier entitlement like a job change, etc? It seems like most of the time active/reservist will get orders, but since I’m out that won’t happen. Is there a distance that the second property has to be within or exceed from my original home?
Lastly, I can restore my entitlement by refinancing to a conventional non-VA loan option, but not the IRRRL?
Thank you for your time with answering this lengthy post. I hope it helps others who may have these same questions.
Chris