Do you know anything that'll take the wind from my sails?

Question

My wife and I have owned our $140k VA backed home in Newport News, Virginia for just over a year. This December, I intend to get out of the active duty Air Force and joint either the traditional ANG or Air Force Reserves.

I do not have the capital for any down-payment, so I'm thinking of joining a unit that is a few hours away, such as Charlotte, NC, and using the VA again to purchase a multi-unit with the intention of living in one unit once per month when I have to work. I could even have mail sent there.

Apparently, multiple properties can be financed with a VA loan as long as you intend to live in them and you don't go over the max, which I've heard is around $417k.

Any thoughts, positive or negative, would be appreciated!

Matt Devincenzo · Answer

You may well be able to pull it off, I'm not saying you can't. But you did ask to take the wind out of your sails, so that's why I mentioned someone already tried a similar purchase and it was denied, so make sure you do your homework with the loan officer before you commit to a purchase and it falls apart at the last minute.

I truly do believe though that they will not see it as a primary residence if you are only in the ANG for one weekend a month, and the rest of your time is spent going to school . This is just what I've seen from others who have tried it, and the way I know loan underwriting works in general for any OO type loan.

Jason Rhine · Answer

Thank you @Brandon Turner, I would appreciate the exposure.

@Matt Devincenzo  I think you are likely correct that I would have more hurdles taking this route, but I don't think this is impossible. For instance, I know that it is possible to have more that one home under the VA; my boss rents his first house out in Alaska and owns a second, his primary, here in Virginia. He lived in the first one for over a year before moving here, and both the VA and his lender are aware of his arrangement. If I join an ANG unit that is six hours away, this will be my primary job because I will otherwise be a full-time student. This seems to me reason enough to purchase a property in the area, and as far as I can find, there are no rules confining my wife and me to the same residence. In a year after purchase, I am free to decide that I dislike the area, move out, and rent both/all units without penalty. After I've acquired enough equity, I can even refinance and use the VA to move my wife and myself into a nicer home.

@Bryan Davis  you may be already aware, but both the VA and lenders are generally perfectly fine with you purchasing a property with up to four units, as long as you intend to live in one. The only problem in my mind is that you can't protect yourself with an LLC because companies are not entitled to VA benefits. I have to confirm this, but I have multiple reliable sources (people who have done exactly this) that suggest the freedom to completely move out after a year or so and rent out your previously occupied unit, supposing the neighborhood or area doesn't suit you.

Bryan Davis · Answer

I'm interested to see what you find out about your ordeal. I'm prior active duty Air Force and currently in the Texas Air National Guard. I'm applying for an active duty commission and boarding on the 11th. I've wondered how I could leverage that VA home loan for investment purposes and I've never considered the multi-family approach. That's some food for thought...

Matt Devincenzo · Answer

Jason I think you'll have issues not with proving the intent to live in the property, but that it isn't really a personal residence but a 2nd home which the VA doesn't cover. You could finance the 2nd property via VA, but they are going to want to see that you are within so many miles of your primary work for it to qualify.

I think Lynn M. here on BP mentioned she and her husband had this problem trying to purchase a property that was too far away from his job. Even though they could show that he only worked 3 days a week in D.C. and the other 4 days they had already been staying in Virginia Beach which is where they were trying to buy. The problem was that it was too far from his primary job and they already have a home in the D.C. area so they said the other home in VB would be a 2nd home and not covered by VA. So with only being there a weekend a month I don't think they'll accept that as being your primary residence.

I'm not colleagues with Lynn so maybe someone else can tag her or you can send her a message and ask. I may have some of the details wrong so I would definitely ask her to see, but I seem to remember that being what she had said before.

Brandon Turner · Answer

Hey @Jason Rhine  I can't offer a whole lot of help, but perhaps I can bump your thread to see. Also - @James Vermillion  knows more about the military stuff than me, so perhaps he'll have some insight!