3 VA Loan House-Hacks for the Newbie Military Investor
If there is one thing that I sincerely dislike in this world, it’s reading 100+ page government regulations. They’re poorly worded, intentionally confusing, and absolutely mind numbing to get through. However, in an effort to learn more about the VA Loan Guaranty program, I decided to bite the bullet…Call me a masochist I guess.
The Code of Federal Regulations is the codification of rules and regulations determined by different government agencies and departments (i.e. Department of Energy, or Department of Veterans Affairs etc.). The one that applies to the VA Loan program is Title 38, Part 36 – “Loan Guaranty”
I took some time this weekend to school myself on the intricacies of the VA Loan Guaranty program before I use one myself. In order to avoid boring the reader to tears, I’ve decided to break this blog down into more manageable chunks. Therefore I’ve listed just 3 of the many valuable aspects of the VA Loan program below.
**Caveat Alert** – I’m not a realtor, lawyer, or banker…I’m just a guy who read some regulations and took some notes. So please, before you take out a VA loan, check with someone to make sure that the below passages apply to your situation. Bottom Line: Different lenders treat the VA loan in different ways.
#1) VA loans don’t just have to be used on a single-family home. They can be used on condos, multi-family (up to 4) houses, and even land. To sweeten the deal, if you’ve partnered with another eligible veteran, you can add an extra unit to that!
(1) Any one-family residential unit in a condominium housing development within the purview of 38 U.S.C. 3710(a)(6) and §§ 36.4360 through 36.4365;
(2) Any manufactured home permanently affixed to a lot owned or being purchased by a veteran and considered to be real property under the laws of the State where it is located;
(3) Any improved real property (other than a condominium housing development or a manufactured home and/or lot) or leasehold estate therein as limited by this subpart, the primary use of which is for occupancy as a home, consisting of not more than four family units, plus an added unit for each eligible veteran if more than one participates in the ownership thereof; or
(4) Any land to be purchased out of the proceeds of a loan for the construction of a dwelling, and on which such dwelling is to be erected.
(Authority: 38 U.S.C. 3703(c)(1) and 3710(a))
#2) VA loans can be taken out for improvement of your current property.
Energy conservation improvement
An improvement to an existing dwelling or farm residence through the installation of a solar heating system, a solar heating and cooling system, or a combined solar heating and cooling system or through application of a residential energy conservation measure as prescribed in 38 U.S.C. 3710(d) or by the Secretary.
#3) VA loans can be used for combined residential and business property. Sounds like a great way to start your own brick and mortar real estate business ey?
Combination residential and business property
If otherwise eligible, a loan for the purchase or construction of a combination of residential property and business property which the veteran proposes to occupy in part as a home will be eligible under 38 U.S.C. 3710, if the property is primarily for residential purposes and no more than one business unit is included in the property.
(Authority: 38 U.S.C. 3703(c)(1))
I hope that these nuggets of information prove useful. If you want to read up on the VA Loan yourself (instead of taking a lenders word for it) I’ve included the link to the CFR at the top.
These three house hacks are just the tip of the iceberg and I’ll be sure to post some more in the near future.
Best of luck!