Lender says “no loan for a 5 hour commute”. HELP

43 Replies

I want to buy a house 2.5 hours from my duty station. I watched my mom travel 3 hours to and from work (6 hours round trip) when ahe worked in NY and she wanted us to go to a good school in NJ so this is normal to me. However, I have spoken to USAA and Freedom Mortgage and their underwriters found the commute to be to unreasonable for the house to be my primary residence. I am ready to wake up 4, get to work at 7, then get back home at 7. The house is a 140K duplex with a tenant and under contract. How do I find an underwriter that will accept that it will be my primary residence? I dont have the assets for a 25% down payment for a conventional loan. I just did the home inspection and termite inspection, $700.

Updated 10 months ago

VA will finance up to a 4 family home

Updated 10 months ago

I have a coworker with a VA loan and a 3 hour commute and a friend has a VA loan in FL while stationed in Las Vegas. She also had to write a letter explaining that regardless of where the military sends her, she wants her home to be in FL. It is very common for military members to have Home Of Records and pay taxes to places that are not near their current duty station.

Updated 10 months ago

I won't be in Montgomery very long and I want to live in Florida. That is why I chose there. The commute is temporary.

Updated 10 months ago

They did request a letter with me explaining why I was choosing my house.

Updated 10 months ago

I found a lender to finance a VA loan. Thank you for your feedback.

Why do this to yourself? I could see doing it if you are transferred after moving and your job is lucrative. Why not buy a house closer to your duty station?

Account Closed.  5 hours commuting is soul crushing. Assuming an 8 hour work day, you'll be away 13 hours per day vs 9 hours per day for someone with a half hour commute each way.

However, if you really want to go for it, you might look at a small local (local to the property) bank or credit union to see if they'll do a portfolio loan.

Originally posted by :

I agree with @Amy Beth .  5 hours commuting is soul crushing. Assuming an 8 hour work day, you'll be away 13 hours per day vs 9 hours per day for someone with a half hour commute each way.

However, if you really want to go for it, you might look at a small local (local to the property) bank or credit union to see if they'll do a portfolio loan.

 What is a portfolio loan

Account Closed A portfolio loan is one that the lender doesn't sell on the secondary market.  They hold it in house and service it for the life of the loan.  Those loans are not subject to the same underwriting standards as loans that are.

Local lenders who really know the market are often more willing to write these loans.  Here in MA, some banks are under a requirement to make a certain percentage of their loans in the communities where they have their branches.

Portfolio loans are often a good tool for cases where a national lender won't write a loan.

Originally posted by Account Closed:

I want to buy a house 2.5 hours from my duty station. I watched my mom travel 3 hours to and from work (6 hours round trip) when ahe worked in NY and she wanted us to go to a good school in NJ so this is normal to me. However, I have spoken to USAA and Freedom Mortgage and their underwriters found the commute to be to unreasonable for the house to be my primary residence. I am ready to wake up 4, get to work at 7, then get back home at 7. The house is a 140K duplex with a tenant and under contract. How do I find an underwriter that will accept that it will be my primary residence? I dont have the assets for a 25% down payment for a conventional loan. I just did the home inspection and termite inspection, $700.

 This one might come down to how it's packaged/presented. I'm not licensed in Alabama, but with a good letter from you I feel that I could sell this to underwriting.

Something that might help would be a history of long commutes. If your current commute is 2 hours each way, and this is bumping it to 2.5 hours, document that to make it easier to sell. If your current commute is a 5 minute walk and you're bumping it to 2.5 hours, that would be harder to sell.

This one is up to the humans. The human LO you work with who packages it, your human story, and the human underwriter. There's no hard-and-fast explicit rule in the guidelines that I've ever seen.

Originally posted by :
Originally posted by

I want to buy a house 2.5 hours from my duty station. I watched my mom travel 3 hours to and from work (6 hours round trip) when ahe worked in NY and she wanted us to go to a good school in NJ so this is normal to me. However, I have spoken to USAA and Freedom Mortgage and their underwriters found the commute to be to unreasonable for the house to be my primary residence. I am ready to wake up 4, get to work at 7, then get back home at 7. The house is a 140K duplex with a tenant and under contract. How do I find an underwriter that will accept that it will be my primary residence? I dont have the assets for a 25% down payment for a conventional loan. I just did the home inspection and termite inspection, $700.

 This one might come down to how it's packaged/presented. I'm not licensed in Alabama, but with a good letter from you I feel that I could sell this to underwriting.

Something that might help would be a history of long commutes. If your current commute is 2 hours each way, and this is bumping it to 2.5 hours, document that to make it easier to sell. If your current commute is a 5 minute walk and you're bumping it to 2.5 hours, that would be harder to sell.

This one is up to the humans. The human LO you work with who packages it, your human story, and the human underwriter. There's no hard-and-fast explicit rule in the guidelines that I've ever seen.

 I do think that there is something about the way that I am presenting it that is a red flag. I was just discussing that with someone Right now, my permanent residence is in maryland so getting a place in fl is significantly better. Do you think you can work with me on my story to get an LO to buy into it? I did get advised to write a letter as well. I just can’t imagine I am the only person who travels often for work to apply for this type of loan. 

A 3 hour commute? Thats the distance from New York City to Washington DC. If i were an underwriter, I wouldnt believe it either.

Originally posted by Account Closed:

I want to buy a house 2.5 hours from my duty station.

I am assuming you are active duty military ?  Does unit unit allow that ?  I was required to be within 30 minutes without special permission from the Battalion Commander

Originally posted by :
Originally posted by

I want to buy a house 2.5 hours from my duty station.

I am assuming you are active duty military ?  Does unit unit allow that ?  I was required to be within 30 minutes without special permission from the Battalion Commander

My unit doesn’t have any restrictions like that

You could probably spend 1500 more a month on a house to have it be 2 hours closer to work. That extra 4 hours of driving per day would easily equate to that assuming about 200 miles.
So, if you could find a $300-350k duplex with similar cash flow, but 2 hours closer, be you'll be money ahead.

  When I googled "Jozelle B air force" your biggerpockets profile was the top of the list.  It says you want to buy rental properties.

That flag probably could not get much more red.

Originally posted by @Amy Beth :

Why do this to yourself? I could see doing it if you are transferred after moving and your job is lucrative. Why not buy a house closer to your duty station?

 This is what happens to the middle class when housing prices become outrageous. It doesn't matter how lucrative a position you get when the average home in a non-ghetto area costs $500,000+.

Originally posted by :  When I googled "Jozelle B air force" your biggerpockets profile was the top of the list.  It says you want to buy rental properties.

That flag probably could not get much more red.

 I dont know why it would be. I cant live in both sides of a duplex...

I appreciate the feedback on getting a place closer to my job but it would be more constructive for me to get assistance on how to present my loan request so it is more favorable to a potential under writer. Thank you.

There are plenty of people who have jobs that require them to travel often or have jobs that have long commutes via multiple modes of transportation and still have a place they call home when the traveling is done. I can't imagine that all of these people would be unable to get a loan so, again, I think it comes back to language. If anyone has gotten a VA loan for a house that is more than 30 minutes from work, your feedback would be very helpful.

I am a lender and if you can prove you have done this type of commute in the past from your rental you can prove it can be done.

If your doing this commute for the first time I understand why they would not think it is is a primary.

Can you buy it as a second home with 10% down?
You would need to show that you could live within a hour of of work and make a small rental place near work. Rent a one room so your ratios allow you to qualify.

Call me with any questions. Scott

5 hours of commute every day will cost you more money then almost any duplex could possible make, and that’s if you’re not occupying it. I would highly suggest saving your money (assuming you can’t find or afford something closer) and rent in the mean time if need be until you have the larger required downpayment.

The other option is you could buy in a cheaper market out of state. If you get transferred you don’t want to have all these one- off rentals all over the country.

Good luck

@Account Closed Ask the bank if they'd accept an Owner Occupant affidavit stating you will occupy the property as your primary residence for a minimum 12 months. With you being in the military it may not work since you can get orders to be stationed somewhere else in a few months but it may be worth a try. I also wanted to add that the underwriter also looks at household size versus property size. If you're single and trying to purchase a duplex that's going to work against you in this purchasing scenario.

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@Account Closed Think about the cost of the gas and capex on your vehicle. You will be putting a lot of wear and tear on your vehicle over the time you are at your duty station.

If you are unable to find a multifamily to house hack near your duty station purchase a home at a price that will work as a rental. While you are at your duty station pay down your loan as much as possible. Find a good property manager you trust, them when you PCS hand over the property to them to get in an tenant and have a cash flowing asset.

Use your second tier VA loan benefits on the next home you PCS. Then do the same, once you’ve used up all your initial benefits apply for the one time reinstatement after you’ve refinanced out of the original loans.

You should be able to get 2-4 houses out of your benefits depending on where you PCS to. By that time you should have enough cash flow you can save for a conventional down payment or commercial loan.

@Account Closed what your mom did was admirable and very understandable given the long term payoff of making sure you grew up in a good area near good schools but she also paid a great price in doing so. That sacrifice is not one you should make unless you absolutely must or the payoff is big enough as was the case for your mom.

I strongly agree that the expense in time, gas, and maintenance will far outweigh the advantages of owning the property that you would be much better living on base, if possible, or renting as cheaply as possible until you have the money saved to buy a property purely as an investment property. You could also consider requesting a transfer to a part of the country that is more favorable to investing near base.

As for the property you have under contract, if it is a good buy on it’s own, consider requesting an extension of the closing date, changing financing, and trying to get the necessary additional funds from close friends and family. The only word of caution here is to get legal advice to make sure you don’t run afoul of SEC syndication laws if you choose to take this approach. Also, make sure to get a team in place to help you manage it from afar.

While using the “How can I?” approach is a great approach and mindset, don’t get so caught up on trying to figure out a way to do it the way you want to that you ignore good advice that will save you time, money, and possibly needless costly mistakes.

Congratulations on finding a duplex! I agree about talking to a local lender. As you know, I just bought a house as well. I bought it through a line of credit that I'm currently trying to free up by getting a regular mortgage. I talked to 4 banks. The 2 nation wide banks refused me because I just bought the house and I need a 6 month or 1 year seasoning period. The 2 local banks both agreed. Since you don't have the money for the down payment, try getting a VA home loan. While I haven't tried that yet, my understanding is it's through a regular bank, just guaranteed through the VA. Since you have to occupy it to get the VA home loan, maybe this will comfort them some. Perhaps even talk about the fact that you are trying to get transferred to Pensacola and hope it happens soon. (Of course, then you have to try, but I didn't say how hard.) Acknowledge that you'll be commuting for a while, but talk about how you love road trips (if you do) and enjoy the opportunity to unwind after work, listen to podcasts, or whatever. Good luck and congratulations again!

I am not doubting your will to commute that far, but I could see how an underwriter would have an issue.

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