House hacking with a family

7 Replies

I am active duty military and I currently am receiving bah for off post housing, would it be possible to use my va loan to house hack while keeping my off post housing for my family to live in or would I be better off finding another way to invest?

@Brandon Butler , I think I understand your question, but tell me if I am off. You are currently receiving BAH and renting an off-base property for you and your family. You want to use your VA loan to purchase a property. Can you do this? Yes. You need to then move out of your rental and into your purchased property. House hacking is living in part of a property and renting out another part of that same property, ie..living in the master bedroom and renting out the other two bedrooms or living in one half of a duplex and renting out the other half. If your question is "Can you use a VA loan to buy a property, but then rent that out while maintaining your current residence?" the answer is no, you cannot use the VA loan unless you intend to live in that property.

Hi @Kevin Hunter, I understand that the property purchased has to be owner occupied, my question was is it feasible to keep the rental for just my family to stay in and I occupy the purchase and house hack that way or should I try a different form of investing given I have a family?

Hi Brandon,

As I understand it, VA requires you to live in the residence for two years.

I have seen where a single person -- an officer making decent money in a location where there was NO on-base housing, and a lifetime investor type -- bought a house in a new development, lived in it 2 years.  He then bought the house next door and rented out the first house.  He may have gotten some cash from mom and dad (dad was also an officer) when he first started out; he owned a house almost everywhere he had been posted.  HOWEVER it was a different time when real estate was quite undervalued.  

I have never seen it where a person with kids did something like this.  Then again, maybe they did but did not broadcast it.  

I have seen it where a military family bought a large home and then rented out the mother-in-law suite to another party, a geographic bachelor/senior enlisted who knew he was going to transfer and retire after 10-12 months.  It did not make much sense to the tenant to move his family for this assignment.  

I guess you could buy a duplex with a VA and live in one side and rent out the other. However, although you have a VA loan available, you are still constrained by your ability to pay for the property. If you spouse works or you have money saved, that can help. So there is a way to "house hack" I guess. I am going to assume you are either an officer or your spouse has good income, or you are a senior enlisted who has saved some money. Otherwise for many enlisted folks, the economics of housing do not readily lend themselves to this scenario. If you are in a house market where they have over-built or you have an advantage (maybe you buy a house from folks that are transferring out?) this could still be feasible.

One thing I read was that an investor would have to get the full support of their family.  There will still be some stress with this.  But I have seen long-term landlords live in one side of a duplex and rent the other side successfully for years (the tenants were typically graduate students or young professional females, they split the duplex 2 or 3 ways.)  Granted, that was a well-developed city and a college town to boot.

If you do find a duplex acceptable to your spouse, you could live in it and if you get transferred you get a manager... or you sell.  

Talk to your spouse.  Look around at your market.  The downside is if your base gets downsized or units get transferred, you could have issues with getting a tenant or selling the property.  

Good luck.

@Brandon Butler I see VA purchases where the buyer never moved in them, when you purchase, As long as it qualifies as owner occupied, the bank will close the deal, however when you refinance a property you can no longer foul the bank as we see if borrower occupies the property or not. So, yes, lots of VA borrowers don't move in the properties, especially in the MF; that's the reality, and that's something that once you share with a bank obviously will kill the deal.

From what I understand you're question is whether you can do a VA loan on a owner occupied property, the other part of your post is not a real estate question, it's up to you to make your family living arrangements

@Stuart Grazier on the VA loan, is not the bank following up, but the office of VA affairs might. Though I see borrowers not moving in, all accross FHA, VA and conventional. Sometime, I get random calls where borrowers are annoyed they didn't receive their first mortgage notice, this is when I know they never moved in the property, or they call me to ask if they can change their ins policy to a landlord one, hmm, now that's just not smart to call the lender, right? But there is nothing I can do...

Basically, if a borrower doesn't occupy is at its own risk, as a lender, in an only make sure the property qualifies as owner occupied but we don't measures in place to police what happened after the closing. However when they come back, especially on a FHA or VA which by definition are owner occupied, a lender will see on the credit report if the borrower ever moved in the property, and that's a deal killer. I see borrowers paying a utility bill just to show address there but they still need to explain why their previous address still show as current on their credit...

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