VA Home loan into rental?

12 Replies

Hey Peter, I currently have a VA Loan on a 4 family I bought about 5 years ago.

To answer your questions, no you don't need to refinance when you move. Your insurance company will need to know though to make the appropriate adjustments.

You can after you have lived there at least a year. You just cannot buy another home with a VA loan until you refinance the original VA loan. It also gets more expensive each time you buy a home with a VA loan.

@Peter K. there is a lot to VA loans. As a former Marine, I didn't know much about them at first either. First, it is a wide misconception that you cannot have two VA loans - and this is VERY wrong.  You can absolutely have two VA loans.  It's also thought you cannot rent a home with a VA loan. You can absolutely do that as well.  This may not apply here but another misconception is that you can't do VA loans over $454,000 but you can. Also, sometimes the funding fee will be higher on your 2nd time - but not always the case.

When purchasing the home you will need to pledge that you will occupy the property within 60 days of the closing of the loan. It is generally felt that occupying the property for 12 months will be satisfactory but how many times have us veterans gotten orders, change of plans, etc. The VA will be understanding with things like that but not if you mislead them into using VA funds for a property you never intended to occupy. Super important that you intend to occupy the property.

Hope this helps.  Feel free to tag me with any other questions. Thanks!

I’m about to PCS from my first home. I bought it for 147k and I’m going to rent it out. I’m buying a fourplex next with the remaining 307k of my entitlement!

Originally posted by @Lorenzo Orsi :
@Andrew Postell currently deployed reserve marine here, question: so as long as you live in the multi family home for a year, you can move out and legally turn it into a rental/investment property? Thanks

@Lorenzo Orsi 

Yes, if it's a single family then you have to live in it at least one year and then you can move out and rent it out. I'd recommend doing what I did though and use your VA loan on a four family. Then you can rent it immediately while you live in one of the units. This is going to be true for FHA loans also.

Originally posted by @Lorenzo Orsi :
@Anthony R. Thank you for replying, would I have to refinance to a traditional loan after I move out? New to the real estate game.

Nope, you can just leave it in place. I still have my VA loan and I live in a different 4 family now

Great stuff! @Anthony R. I really wish I would have done that. But like they say if you knew better you would have done better. I purchased my first property utilizing my VA loan however I did not buy it as an investment or with the perspective I have now. It is now a rental and I've used an FHA loan for the current duplex I am House Hacking. I hope to find a Quad-Plex in the near future I can utilize my VA loan again.

Best of luck @Lorenzo Orsi  

@Peter K. if you had anything more specific you needed answer, please update the post. But like all have said previously there is nothing wrong with renting out your property you have purchased with your VA loan as long as you fulfil your owner occupied time frame.

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