switching VA home loan to another conventional loan

[Victor Olvera]

So I'm planning to buy a small multifamily property (2-4 units) with my VA home loan to start out my real estate investing. but later on, when I move, I will want to use that VA loan again because you can only use it for your primary residence. so, will I be able to change that VA loan to another conventional loan when I move?

[Erik Browning]

Quote from @Victor Olvera:

So I'm planning to buy a small multifamily property (2-4 units) with my VA home loan to start out my real estate investing. but later on, when I move, I will want to use that VA loan again because you can only use it for your primary residence. so, will I be able to change that VA loan to another conventional loan when I move?

This is my favorite strategy for new real estate investors that have access to a VA loan. The reason is because you have a unique opportunity to get into a home with a loan that is forgiving, requires little money down, and has the best possible rates available to investors. As a veteran myself that has used my VA benefit multiple times, it's simply the best way. Also, you can "split" your VA loan and reuse it to have a 2nd VA loan. Yes, you can have 2 at one time. This is a great way to begin investing with guardrails.

Few things to know before we get started.

1. Your entitlement is tied to both the loan amount as well as the county for which you purchased the home. For example, you live in Harris County, TX where the county conforming loan limit is $647,200. The VA will "guarantee" 25% of that purchase price before the entitlement is "used up." You can find your county's loan limit using this calculator.

2. You CAN purchase beyond $647,200 in this example for Harris County and the entitlement will still be considered "used up." Again, you can purchase beyond that limit.

3. You can also use up "part" of your entitlement by purchasing a home in Harris County for half ($323,600) of the county's loan limit, which will eat up 50% of your entitlement, and also leaving the other 50% remaining for future use.

Now you can use your VA loan a 3rd time. Yes, you can. To do this, you can apply for a "1-Time Restoration," however there are a couple other steps that need to be completed first. 

1 - you need to refinance both homes into conventional or some other financial product like a DSCR.

2 - you need to apply for a 1-Time Restoration through your mortgage broker.

Couple things with the 1-Time Restoration: this is your ONE AND ONLY TIME in your life that you can do this. Once you request the restoration, you get zero other opportunities to pull this trick. So make sure you do this with homes that are quality investments. Also, you can repeat the "split entitlement" trick as mentioned above, however if you ever want to get any sort of VA benefit beyond these potentially 4 properties, you have to sell every single home associated with a VA loan, even the ones you refinanced.

How do you submit a 1-Time Restoration Request? Ask your broker to complete the paperwork and submit to the VA.

If you'd like to talk to a VA representative about this, call the VA's Regional Loan Center.

You can get 4 homes this way (more if you live in cheap areas) and I recommend all active duty, reservists, and veterans begin their journey this way while also saving to buy using more conventional investment properties using DSCR or conventional properties.