Need Investor Friendly VA Lender in San Diego

Rental Property Investor · San Diego, CA · Member since 2019 · 35 posts · 15 votes

I'm looking to house hack in San Diego with my VA loan benefits and need an investor friendly lender.

Specifically, I want to purchase a 2-4 unit property, live in one unit, and use the others for STR, long term, or a combination of the two. I would like to find a lender who not only works with VA loans, but also understands investors and will give appropriate DTI credit for the rental units, especially the STRs. Thanks!

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Caroline Gerardo

Lender · Washington DC · Member since 2015 · 2k+ posts · 2k+ votes

A VA Underwriter will NOT give you the income on short term rental, only what appraisal survey says is market rents (on the subject with the VA loan). If you have STR on your tax returns they will use it as income. You will need leases and deposit checks at closing. Don't accept existing tenants without seeing the past 20 months cashed checks as soooo many took covid claims not to pay and you will have the cost of evicting them. The VA loan is structured to protect you- the property cannot have any health or safety code violations. It's vital that seller accepts the offer with VA noted as it puts the seller in the position to abide by the rules (not you as buyer).

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Caroline Gerardo
Lender · Washington DC · Member since 2015 · 2k+ posts · 2k+ votes
4y
A VA Underwriter will NOT give you the income on short term rental, only what appraisal survey says is market rents (on the subject with the VA loan). If you have STR on your tax returns they will use it as income. You will need leases and deposit checks at closing. Don't accept existing tenants without seeing the past 20 months cashed checks as soooo many took covid claims not to pay and you will have the cost of evicting them. The VA loan is structured to protect you- the property cannot have any health or safety code violations. It's vital that seller accepts the offer with VA noted as it puts the seller in the position to abide by the rules (not you as buyer).
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Doug Spence
Investor · San Diego, CA · Member since 2016 · 1k+ posts · 975 votes
4y
@Nathan Maier I just purchased a property to house hack in San Diego and I used Jon Lallande with Cross Country Mortgage. He was able to do a 17 day close on a VA loan, which is very competitive and a much shorter close than most lenders can provide. He's also a USMC vet.
Good luck and let me know if you have any questions!
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Ryan ThomsonBusiness Member
Real Estate Agent · Colorado Springs, CO · Member since 2018 · 1k+ posts · 1k+ votes
4y
Great idea @Nathan Maier!
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Marc RiceBusiness Member
Real Estate Agent · Columbus Cleveland Dayton, OH · Member since 2018 · 2k+ posts · 1k+ votes
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It may be tough for them to use the STR income without 2 years trailing numbers, but you could use market rent numbers or long term leases if you have them. Most lenders should be able to use the rental income without an issue. The short term rental income is going to be your hardest challenge.
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Nathan Maier
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Rental Property Investor · San Diego, CA · Member since 2019 · 35 posts · 15 votes
4y
Originally posted by @Caroline Gerardo:
A VA Underwriter will NOT give you the income on short term rental, only what appraisal survey says is market rents (on the subject with the VA loan). If you have STR on your tax returns they will use it as income. You will need leases and deposit checks at closing. Don't accept existing tenants without seeing the past 20 months cashed checks as soooo many took covid claims not to pay and you will have the cost of evicting them. The VA loan is structured to protect you- the property cannot have any health or safety code violations. It's vital that seller accepts the offer with VA noted as it puts the seller in the position to abide by the rules (not you as buyer).

Thanks Caroline, I was worried this would be the case. STR in the properties I am looking at is at least double the long term rent, and hitting the DTI requirements with only appraised market long term rent probably won't happen. Is this a hard rule that underwriters are going to be firm on? I understand the VA underwriter guidelines give credit for landlord history. I have 6 years experience as a landlord on 3 properties now that have been excellent performers.

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Drake Thompson
Member since 2018 · 3 posts · 0 votes
4y
For any VA questions, I always refer my clients over to Eric Johnson at Neo Home Loans. He is very well versed on the investment side and can give you some great insight.
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Caroline Gerardo
Lender · Washington DC · Member since 2015 · 2k+ posts · 2k+ votes
4y
Hard and fast rule for a VA Underwriter (also for FHA/Conventional they all will not use proposed STR). If you have STR in the past on tax returns they will use those that you continue to hold but not on the purchase. Yes in San Diego with lots of tourists you can increase the income if the units look cute in photos but the Underwriter won't give you the income boost. Do you really need the income? Let's chat about numbers and see without running your credit even. (I'm a veteran and been doing VA loans for 29 years)
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Erich Brown
Realtor · San Diego, CA · Member since 2019 · 20 posts · 8 votes
4y
Hi @Nathan Maier, I have a couple of good recommendations for you! Jon Lallande from CrossCountry Mortgage has some amazing incentives for military and same with Andrew Schroers from the lehman group. The STR income wouldn't count toward the DTI, but the projected market rent will. (So that will help a little) Let me know if you would like to talk strategy! 🤙🏻
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Mark Frattini
Real Estate Agent · San Diego, CA · Member since 2014 · 338 posts · 176 votes
4y
I have a great VA lender with RE investment experience here in San Diego.
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