According to this post, VA loans can be used to secure commercial property if it was originally zoned to be residential, which is great news. That said, the example in the above post is still less than 4-units, which is the VA's cut-off for residential to commercial. Does anyone know if a property that was originally zoned residential but rezoned to commercial, but has 5+ units is eligible for VA, assuming all other eligibility guidelines are met?
For anyone interested, here's the legal document governing the VA Loan Guaranty Program, I tried interpreting it in light of the above information, but I'm really not that great at interpreting legal speak.
@Brendan Morin I don't know...But I'm going to look in to it. In the mean time, if you're looking at a 5 unit property, it appears that you can buy a property with 5 units, as long as you use one of the units for your business.
2.a. "-the residential property may not consist of more than four family units and one business unit except in the case of certain joint loans. (See section 1 of chapter 7 for this exception.)"
So if I cant find any good 4-plex's...I'm going to start looking for 5'ers. Then I can have a whole apartment as my office! haha. I don't know how pulling this off would work in practice, but on paper it looks legit.
I'll try to get back to you about the re-zoning bit.
@Tyler (not sure how to tag on mobile), I wrote to the VA and this is what they responded with:
"The maximum number of units is 4. The residential appraisal form 1025 for multiple unit properties is for 2 to 4 units. Anything larger than 4 units requires a commercial appraisal and by definition is a commercial property and not eligible for VA guaranty. With regard to zoning, VA requires that residential be an allowable usage no matter the zoning type and the highest and best use of the property must be residential and not commercial. The property must be residential in nature. We see many properties that are in an area that was zoned residential and later became commercial/residential and are still acceptable since residential usage was still typical in the area."
So maybe you could do 5 of one was an office, but I'm not sure. Couldn't hurt to try!
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