Getting Creative with the VA loan

Getting Creative with the VA loan

Member since 2023 · 1 post · 0 votes

Looking to purchase a property that is currently zoned commercial but is allowed to have residential use on the second floor. This property was very clearly a SFH when it was built but it has since been converted to office spaces on the lower level and two apartments on the second story. The only real 'conversion' to office space was a reception window built in between what would have been the family room and living room otherwise it is still very much laid out like a residential home along with a kitchen and 2 full bathrooms. I have already reached out to the city to find out if the bottom level could be converted back into residential space and was told I would need to apply for an exception. Without being able to use the bottom level as residential it would not meet the less than 25% commercial space requirement as I understand the VA has. I am obviously wanting to house hack this property and would love to do so with the VA if possible and my offer would be contingent on the exception being approved. Is there any chance I could find a VA lender that would fund this?

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  • Lender · Member since 2023 · 43 posts · 10 votes
    3y

    Morning. I sent the scenario to one of my lenders who does a lot of unique scenarios for VA deals. This was the response from the underwriting desk. Let me know if this helps at all.



    a. Eligibility Considerations A property that has both a residential and business use may be eligible for loan guaranty if: • the property is primarily for residential use, • the non-residential use does not impair the residential character, • the property contains no more than one business unit, and • the property is legally permitted and conforms to current zoning, or is a legal, non-conforming use that is accepted by the local authority. b. No Value to Business or Commercial Property No value may be given to the business operations or commercial fixtures in the appraisal.

  • Lender · CO CA TX WA ID OR · Member since 2020 · 419 posts · 542 votes
    3y

    Hi @Curie Clark, you can do this under the "mixed use" guideline, but the property needs to have specific criteria. I'd offer to help, however I'm not licensed to operate in Virginia. I do however know a solid Vetted VA lender that can help you out. Send me a DM

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