Real estate license

15 Replies

1. You can't use VA loan for anything but primary residence.

2. In my understanding, you can use up to the limit of your VA entitlement across multiple houses-as long as you have held occupancy at each one for one year before revolving to investment property. You're not supposed to revolve at all, but the bank doesn't care as long as they get paid.

@Lance Bautista

I would call my lender and ask him the best option to get VA eligibility back. I am in the same boat. I just sold one of my properties purchased with a Va loan and needed to figure out how the entitlement is restored. Your lender should be able to answer that in five minutes. 

That being said, your plan is solid. Finding small residential multifamily and house hacking with the VA loan is the best way to enter the REI world. I was planning to call my lender. I am pretty sure you have to sell the property to gain full eligibility back. Below is an article I found. 

https://www.veteransunited.com...

Refinancing to Restore VA Loan Entitlement

"Restoration looks different when we talk about refinancing—the big reason why is that you aren't disposing of the property when you refinance.

A VA homeowner can refinance into a non-VA loan (conventional, FHA, USDA) and pay off their original VA loan in full. But because you're holding onto the property instead of handing it over to a new buyer, entitlement restoration options get narrower. Otherwise, VA buyers could potentially purchase home after home, refinancing each new VA loan and fully restoring their entitlement each time."

Sincerely, 

Josh 

Ok, I understand the question a little better now.

Here's the decision point you need to come to: will you make more over the holding period by refinancing? Factors to consider include: interest rate change (from current rate to new conv rate) and PMI/not (VA is 'not').

@Lance Bautista

Refinancing to Conventional:

When talking to some people

in my network I brought up this topic. One concern I have is you have to pay the VA funding fee again. Unsure of the exact truth to this as I haven't done it myself.

The other concern is that if you don't have 20% equity in the house you will have to pay PMI when you refinance to that conventional loan. Like most Soldiers using the VA loan I didn't put any money down initially.

Using the rest of my VA entitlement:

I live in Colorado Springs and using the rest of my VA entitlement wouldn't cover a whole house and I'd need to put down 25% of the difference as stated in the VA loan policy.

With both options considered I might as well just save 20% for a down payment and avoid all of the hassle.

What does everyone else think?

@Stephen Karagosian last year I refinanced my VA into a conventional loan and used my restored entitlement to purchase my current home. If you're looking to both buy a new home and work on finding a new rental, I would consider a slight cash out refi and use the VA for your new home. This loan has given me easily a 5 year head start on building my rental portfolio. Happy to talk more about it, theres a Real Estate meetup at Oskar Blues downtown tonight at 7 I believe (could be 6 but I'm spacing on the time at the moment). Either way, best of luck in your journey and would love to hear what path you end up choosing.

Jeremy

I bought my first home 5 years ago, so yeah I definitely had some equity hanging around. I don't remember it being any more expensive than any other refinance I have done. 

Isaac is correct about the funding fee, however if I'm remembering correctly mine was waived because I VA disability compensation. I'd say check with your lender and see whats goin on. Never hurts to ask.

Stephen,

Check out House Hacker mafia on Facebook or meetup. Next meeting is in 3 weeks I believe, its a newer group and have really enjoyed the two meetings I've been to. To answer your question, yes I am in the Springs. 

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