Is it possible to use my VA loan for a second property?

9 Replies

Hey guys,

Just closed on my first property using my VA loan. The goal is to live in this property for 1-2 years while increasing the value and turn it into a rental and move into another property. I'm having a hard time finding the exact rules on the VA loan for this so my question is has anybody done something like this, and is it possible to use your VA loan multiple times?

Thanks!

You sure can man. It depends on how much of your entitlement you used on your first property. A lot of military guys have done it just how you're doing. Your first couple are easy, after that it gets a little tricky.

Yes it is definitely possible and an excellent strategy. Couple things to note:

- The VA Funding Fee goes up with each subsequent time you use the VA loan. It is a pretty big jump after the second or third time and unless you put some money down, you will be underwater on your property for a year or so.

- If you buy more than one primary residence in the same area, it will raise some questions from the underwriters. My wife and I purchased two houses with the VA loan in the Camp Lejeune, NC area. When under contract to purchase the second, we had to provide a letter to the underwriters justifying the second purchase. The second home is bigger and closer to work and that was more than enough explanation.

As stated above, you can use the VA loan on multiple properties. There are "total" limits but I don't think there is a limit to the number of loans, just the sum of all the VA loans.

Also as stated above, if you try to acquire another property in the same area there are stipulations and restrictions. The loan program is not intended or designed to be used for investment properties but it is a good vehicle for that if you can work within their framework.

A multifamily is a good strategy.

Yes you can. There is a misconception in the military community that you can only use a VA loan once. My recommendation would be to rent out the first property, and then use the VA loan again if the location is fitting to buy again. It's a no brainier if the area is decent and you're receiving BAH. Take advantage of the tax free BAH that will help pay down the principal, the tax benefits, and eventually putting a renter into it once you PCS. Rinse and repeat, and watch your net worth grow.

I have a question along the same line. I see the different limits for different counties and different amounts of units (thanks for the link Tom). My question is if I used my VA loan for a single family in county A and wanted to use the remainder for a three-unit in county B, which limit would apply?

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