Minimum Time Residing in Primary Home?

4 Replies

I purchased a home with a second VA loan approximately a year ago. The house is great, but for a variety of reasons I'm interested in moving to a nearby city and making this home a rental property. I vaguely remember seeing something in the mortgage paperwork about a requirement of this home being my primary residence for 2 of 5, or 3 of 5, years but I cannot find this. Does anyone know if this is my imagination or a real requirement.

I know there are tax implications if I don't live in the house 2 of 5 years. Since I'd be making it a rental that I don't plan on selling at any point in the foreseeable future (certainly not in the next 5 years) so would this matter at all? Any thoughts or advice are greatly appreciated. Thanks!


@Brian Olson I would speak to the VA lender, but I can't see there being an issue since you got the loan with the intent of living there. They must have this situation come up at times and as long as there is a reason for your move and that you have already proven that you lived there for a good amount of time you should be okay. I think they just don't want people getting loan and the immediately renting it.

The 2 of 5 thing is only for federal tax (121 exclusion). Generally all OO loans will specify a minimum 12 month period and you sign an affidavit to the effect that you agree to that.

I believe VA is actually the only one that's affidavit doesn't specify a minimum. You do still have to purchase as OO, and you have to intend on living there but you didn't "bind" yourself to that 12 mo period. That said 12 mo is probably a good minimum time to stay to "prove" out your original intent.

Thanks for the great responses!

12 months meets the required minimum as to your intentions of occupancy in all owner occupied mortgages. The reality is, life changes and things happen. It is the intent that must be shown by a borrower and if something happens beyond your control, like divorce, or job transfer, you can be granted a waiver as to the occupancy. Turning a property into a rental within a year won't show good intentions without a good excuse why you had no other alternative. After one year, your intentions of "investing" are less likely to be shown or proven, things change, growing family, needs change, etc. 

If you agree to a longer term, matters of any hardship are still considered and with justifications, you may be allowed to bail out. :) 

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