Deciveing the VA/Bank about primary residence?

Question

We want to purchase a duplex with my VA loan, which requires you to move in 60 days after closing. Our problem is that both units are currently rented and the next lease to end is March 1st, putting us way past the 60 day mark.

Out real estate agent suggested that we get a P.O box in the neighborhood and have the water bill sent there to "prove" our primary residency. Now we will eventually be moving in, but it will be 180 days after closing not 60.

This seems kind of sketchy to me and I'm not sure how comfortable I am with doing it. Does anyone know of any fall back that could happen from doing something like this?

Shaun Weekes · Answer

@Austin Keelen

What your realtor is asking you to do is wrong.  He/She will get their commission check and when the VA takes action against you I'm pretty sure the Realtor won't be around for support.

Get an honest realtor!!!

You would have to have your loan officers UW (underwriter) contact the VA to see how they would want that situation handled.

Shaun Weekes · Answer

Laura,

I'm not sure what the rental laws are in NJ.  The best thing to do is having the UW call the VA to see how they would want this handled. They're very good at giving direction.

Mike Cumbie · Answer

@Austin Keelen Actually just read this, they may go 180 days... Also, how do you feel about adopting one of their children to satisfy a dependent requirement (heh)?

7. What is “reasonable time”?

VA loan occupancy requires that the veteran move into the home  within a “reasonable time.” But what does that mean? The VA requires  that the borrower move into the home within 60 days after the VA loan  closes.

As you’ve read, there are exceptions to that rule. The 60-day rule may be waived if you meet both of the following conditions:

• You certify that you will occupy the property at a specific date after your VA loan closes
• There is a specific event in the future that will make it possible for you to occupy the property on that date

Generally, the VA does not make exceptions if you want to set an occupancy date for more than 12 months after your loan closes.

Austin Youmans · Answer

You can try doing cash for keys for one of the units but that would need to be worked out before closing. otherwise everyone is right and that is illegal.

Leland Barrow · Answer

That is called fraud. It is not sketchy it is illegal. Insurance is the biggest issue. If you insure the property as a primary residence, and you have a claim for a fire, or whatever then you will be left holding the bag. Have you tried being honest with them?

Account Closed · Answer

Shaun Weekes -- can you do an owner move-in eviction for one of the units?

Mike Cumbie · Answer

Hi @Austin Keelen,

Yeah I pretty much echo the other posters. Don't want to be on the wrong side of the feds on that one. I bought my first house as a VA with a little in-law. The program is to help vets get into home ownership not get into investing so the 60 day rule will be pretty stringent (just my thoughts of course).

You could try the cash for keys route @Austin Youmans suggested, but not sure if the owner will let you start discussing that with his tenants before hand (I wouldn't because if something happened you just made my tenant plan to leave and I have a vacant apartment. you can walk away from the deal).

The other creative solution is that you can have a spouse live there. So if you marry one of the tenants you could file for an annulment after they leave.......OK maybe not my best out of the box thought...

Rolanda Eldridge · Answer

Too much Risk for you....Pass on the Deal...Other opportunities will open up or this one might be available when your ready...

Peter Vekselman · Answer

@Austin Keelen there are quite a number of buyers throughout US sitting in jail for committing mortgage fraud.  this would definitely be considered that.

having said that, I would talk to your mortgage people to see what can be done.

why not just have the closing pushed off till then.  you can put a substantial down payment.  this will give the seller a comfort level that you are a real buyer.

bottom line disclose to everyone what is going on and then you, your lender, seller and the agents all become like a team and come up with a creative solution.

very few legitimate deals truly have to die.....they just all need to be worked.....

peter

Deciveing the VA/Bank about primary residence?

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