Assistance with maximizing the use of a VA loan

7 Replies

Hello,

My wife and I are relocating in October to Oceanside, CA. We are really interested in getting our feet wet in REI. The most effective vehicle we have right now to purchase our first property is using a VA loan for the first time. We have been pre-approved.

We have been studying the market for the last month in the Oceanside area since I will be stationed in Camp Pendleton but nothing that we see seem to work with our numbers. 

I have asked the RE agents we've worked with about purchasing a short sale or foreclosure but they are always reluctant to proceed. 

I don't read anywhere that VA can't be used to purchase short sales or foreclosures.

Can anyone assist me with any ideas (conventional or unconventional) on how we can use our VA loan to our advantage and maximize the benefit?

***We are aware of most of the prerequisites we must abide by using the VA loans. I am just looking for advise, ideas or guidance from someone who started in a similar way.

Thank you

Hey @German Buendia

Welcome to BP and an early welcome to San Diego! 

I'd be more than happy to chat with you about the most advantageous way to capitalize on the benefits of the VA loan and how it may be best utilized in SD. Shoot me a colleague request whenever you have a second!

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@German Buendia - I just bought a home VA in Denver area so I was looking at many homes out of my budget. The rule I was told is that you cannot take extra out on a VA so for a fix-up (foreclosure/short sale). So if it cost 20K to get the house to VA standards, remember you have to get a VA inspection, that has to come out of your own pocket. Plus any other fixes you might want to do.

Perhaps the agent knew most of them where so far out of VA lending standards that it would cost too much out of pocket to be a good deal.

@German Buendia ,

They've just got you bouncing between Hawaii and Pendleton huh? Lucky lucky. My time in was similarly lucky, no time at 29 Palms or Camp Lejeune. 

Anywho, the problem w/ VA and short sales or foreclosures is that VA isn't a great fit for fixer upper type projects. Most folks that aren't paying their mortgage also aren't maintaining their homes, so these types of properties tend to be fixer uppers.

For context, VA loans have the lowest income/credit/asset standards of any mainline Agency loan program, but they compensate for this with the highest property standards. Dept of Veterans Affairs wants you in a turnkey home.

You can get a somewhat fixer and take the risk of spending to fix a home before closing when technically you own it. I spent ~$2500 on my 'granny home' that a family had been living in for 70 years and no updates in about 30 years since grandpa passed away. Then, post-closing and having made no down payment, we made our equity move in the form of a new kitchen and bathrooms and similar. That type of scenario, where a family has owned it for a zillion years but not done updates in ages, but it's still a complete and functional home, is about as far as you can push VA loans in terms of fixers. That's a great way to take advantage of the VA loan -- no down payment, so keep that nest-egg in your pocket and use it for an equity move after the fact.

Feel free to reach out if you want to chat.

Hey I just used my VA to get a HUD prop. The process is pretty slick, make sure you have a good broker though. The only hang up you may run into is the appraisal. Since it is bank owned, they WILL NOT make any repairs to the house. And you are "not allowed" to make any repairs yourself. The VA won't approve the loan if the house is not up to their standards.

Originally posted by @Chase Shank :

And you are "not allowed" to make any repairs yourself. The VA won't approve the loan if the house is not up to their standards.

From time to time, villainous vandals have been known to enter HUD properties and fix things after using mind control witchcraft to make the buyer's agent let them in, those dastardly evil-doers.

I'm neither a vandal nor a witch nor involved in such happenings, but beware that such mystical forces are out there!