VA Loan: The Real Estate Investor’s Guide to Eligibility & Funding


As the spouse of an active duty service member, I can honestly tell you that I attribute the humble beginnings of our investing career to the VA loan. The 0% down VA loan allowed us to fund two different houses. Once we were transferred, we rented the house. This was a great way to get into a house with low entrance costs.

While I am no expert in VA loans (let’s just call me an experienced landlord who has limited funding and likes to exploit every legal resource to fund her empire), I have learned a lot over the years. Since I have seen a lot of questions on the VA loan in the Forums, I wanted to put together this guide based on personal experience and what I have learned over the years. As always, this is only a good starting point and a way to do some preliminary homework before you get started. It does not replace a knowledgeable broker, so make sure you research and find a great broker.

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VA Loan: Who’s Eligible?

The first thing to looking into is who is eligible to use the VA loan. The great thing is it extends far beyond current active duty members. The following eight types of people are eligible to use the VA loan:

  1. Veterans
  2. Current or former National Guard or Reserve members who have been activated Federal active service
  3. Active duty service members
  4. Current National Guard or Reserve members who have been Federal active service
  5. Discharged members of the National Guard who have never been activated for Federal active service
  6. Discharged members of the Selected Reserve who have never been activated for Federal active service
  7. Surviving spouses in receipt of DIC (Dependency and Indemnity Compensation)
  8. Surviving spouses not receiving DIC benefits

This is the link to find out more information on whether or not you are eligible. The specific service requirements and time periods can be found here.

Types of Purchases a VA Loan Can Fund

As an investor, I love 0% down loans. Unfortunately, a VA loan, while amazing in the fact that it has no down payment requirements, is very specific regarding what it can be used for. If you or your dependents are unwilling to live in the house, this loan will not work for you. This is a federally sponsored program, and there are very specific requirements to what can be bought with a VA loan.

As defined by the VA, the loan can be used for these five types of homes. As mentioned above, all of these must be your personal home. The specific VA wording can be found here.

  1. Buy a home or condominium unit in a VA-approved project.
  2. Build a home.
  3. Simultaneously purchase and improve a home.
  4. Improve a home by installing energy-related features or making energy efficient improvements.
  5. Buy a manufactured home and/or lot.

va loans

A Few Notes on Home Types


Personally, I will not buy a condominium. The VA, FHA and other government-approved loans have very specific requirements regarding condominium funding. At one point (not sure if it is still in play), complexes that had more than 30% that were rentals were not eligible for these programs. This causes many areas to lose the ability for future buyers to buy into the complexes.

Once these complexes were no longer eligible to meet these requirement,s these units sat longer and even lost value. To further exacerbate the problem, many condo communities have or create rules regarding the number of rentals allowed, or they forbid it all together. This creates a huge issue regarding an exit plan.

This is why I don’t buy condos and I check all HOAs very closely to make sure there are no laws against making my home a rental once I move out of the area. As an investor my number one protection is the ability to rent my home.


The VA allows you to buy a single family, duplex (2 units), triplex (3 units) and a fourplex (4 units). The key is that you have to live in one unit, but you are still allowed to rent the other unit(s) out. The great thing is the VA loan will count the income of the other properties when helping you qualify for this property. Therefore, one can oftentimes qualify for a more expensive property.

Defining VA Loan Eligibility

Now that you know what type of property you want to live in, the key is to figure out how much property the VA loan will allow you to purchase with no down payment. Unfortunately, it’s not as simple as it sounds because it’s based on your location; there is not a universal rule for the entire country. The lowest total amount is $417,000 for a single family. All the numbers after that are based on location and the number of times the loan has been used.

The VA location list to check eligibility can be found here.  The key to remember is that the VA eligibility is not your final amount of the loan available. It is simply the amount that you can borrow at 0% down. A lessor known fact is that you can exceed the VA loan; you simply will have to put down a down payment.

VA loan

What Types of Fees Does the VA Loan Entail?

While there is no PMI in regard to the VA loan, there is a funding fee. This helps cover the costs of the loan and for those who default. The funding fee changes based on the number of properties that you borrowed. The funding fee increases as you increase the number of properties. The funding fee can be rolled into the loan price.

Information via

Information via

How to Waive the Funding Fee

Another lesser known fact is if you have a VA disability rating, then you might qualify for the fee to be waived or reimbursed. There are five groups that can get their funding fee waived.

  1. Veterans receiving VA compensation for service-connected disabilities
  2. Veterans who would be entitled to receive compensation for service-connected disabilities if they did not receive retirement pay
  3. Veterans who are rated by the VA as eligible to receive compensation as a result of pre-discharge disability examination and rating or on the basis of a pre-discharge review of existing medical evidence (including service medical and treatment records) that results in issuance of a memorandum rating
  4. Veterans entitled to receive compensation but who are not presently in receipt because they are on active duty
  5. Surviving spouses of veterans who died in service or from service-connected disabilities (whether or not such surviving spouses are veterans with their own entitlement and whether or not they are using their own entitlement on the loan) — depending on your house price this could add up to a significant amount of money

Think you might be eligible?

3 Ways to Verify Your Exempt Status

  1. Have a properly completed and signed VA Form (26-8937) and a Verification of VA Benefits indicating the borrower’s exempt status.
  2. If you are a veteran who elected service retirement pay instead of VA compensation, you will need a copy of the original VA notification of disability rating and documentation of your service retirement income.
  3. You will need to indicate on the Certificate of Eligibility (COE) that the borrower is entitled as an unmarried surviving spouse.

veteran's association

Using the VA Loan to Fund Multiple Loans

The great thing about the new VA rules is that you are only given a set amount, but you can buy as many houses as you want as long as you don’t exceed your entitlement. The limiting factor isn’t the number of houses; it’s the entitlement amount. It is important to remember your entitlement includes the purchase price AND the funding fee (described below) of your location.

To Figure out Your Entitlement

Equation: Current Location Entitlement – Previous Entitlement(s) if you have multiple (Funding Fee included) = amount you have left.

Personally, we have bought two houses with the same loan. Our first house was bought in Virginia Beach. We paid $234,000, and after the funding fee, we had used $239k. We then bought a $163k house in Hanford, CA for $168k after financing. While these are off the top of my head, the point is you can totally buy multiple houses. The key is to make sure you have money left over from the first house so you can use it again.

The great thing with these rules is that you are rewarded for buying cheaper homes. This has worked great for us, as we buy the “worst” house in the best neighborhoods. These of course are the smaller houses typically, but that has also been great, as we have found those have the biggest bang for the buck.

Note: Your entitlement amount is based on your current location, not where you first used the loan. Currently, we have used up a little less than $417,000, so most locations we would move to would not have anything left on the loan. That being said, there are a few places that have a top limit of closer to a million. In one of those locations, we would be able to use the difference (approx. $500,000) to buy another house.

This is great to keep in mind because if you are “out” in one location in regard to your VA loan eligibility, it does not mean you should not have your mortgage broker check your eligibility in the next place you go. It never hurts to ask; you could be missing out on an opportunity!

How to Finance Above Your VA Loan

As mentioned above, the VA loan does allow you to finance above your VA loan amount. The key thing to note is anything above the VA funding amount requires a down payment of 25%. So if you go above your funding amount by $10,000, you will now owe a down payment of $2,500. If you need a much higher amount, this can add up quickly.


Note on Why You Might Go Above Your Entitlement

The last I checked, VA rates were lower than most conventional rates. Depending on the rates for conventional loans, this loan could make sense even with the funding fee. It is important to check all the rates because these change. Even with the funding fee and having a down payment amount, this might have a lower payment than another type of loan, especially if you qualify for the funding fee to be waived.

Did I miss anything regarding the VA loan? Do you have a VA? What has been your experience?

Let’s talk in the comments section below!

About Author

Elizabeth Colegrove

Elizabeth Colegrove is a passionate "buy and hold" investor who specializes in turning her once-negative transient lifestyle (Military) into a positive lifestyle. She self manages her entire real estate portfolio from long distance while holding down a full time job. When she isn't finding new real estate deals, she enjoys traveling, hanging out with her awesome boat-building husband, playing with her mischievous kitty, or writing on her newest project, her blog.


  1. Kevin Polite

    Great post. I just sold a house to one of my former tenants who was using a VA loan and they had to take the girlfriend off the loan because they weren’t married. They walked away the closing table with only paying $400 down. The VA includes a VA Lending Fee that was added back into the loan.

  2. Thanks for such a great post Elizabeth. I’ve learned so much. Wow, even with a full-time job, you self-manage all your portfolios! So I’d like to know, how much time do you put into managing your properties per day? or better yet, doing the long distance managing, can you describe your typical work day with managing these multiple properties?

  3. Great post Elizabeth. We have used our VA over and over. We just used the multiple property angle when returning from Italy last year. We already had a home rented out in Oklahoma City and were still able to purchase a home just outside DC as well. Mostly because of the area and the limit being $692,000. We have actually sold our house in Oklahoma since as there was no cash flow on it. However we do own multiple other rental properties there. Also we found that shopping around for a lender more than one offered to cover the funding fee as an incentive for us to use them.

    • Brendan Morin

      Great advice, Sarah. I had a similarly positive experience with shopping around lenders – though they didn’t offer the pay the funding fee, I was able to get a significant number of other fees waved and my rate reduced. That said, spending too much time pitting lenders (specifically local) against each other for the best rate is also a good way to burn bridges, so I think there’s a good balance to be struck there.

      • Elizabeth Colegrove

        True! I also have found that the cheapest options can be the slowest options. We have bought many distressed properties. We have always gone with our tried and true broker who we will know complete the deal rather than the cheapest option. So there are many thing to keep in mind when shopping for the best rate.

  4. Brendan Morin

    Excellent guide, Elizabeth. Just closed on my second 4plex in 6 months using VA financing for both. While it’s true that you do need to live in the home for 1 year following purchase, there are a number of legitimate reasons that can get you out of your current home earlier and let you purchase another primary (even in the same area). Many lenders will say this is not possible, but that’s generally because they just do not have experience with these kinds of situations.

    My favorite VA benefit is being able to walk away from closing not only without having to pay a cent, but actually getting paid to close! You can read about my experience getting paid when closing on my first 4plex, as well as a few other lessons learned here::

    • Elizabeth Colegrove

      That is true! Like any loan there are some specific loop holes. I personally tend to be on the conservative side because of it being a government loan and the nature of my husbands position. Still even as a conservative VA investor its a great loan, and certainly was the key to us getting started.

  5. VA loans are only a good deal if you can get the seller to pay for the loan. I turned down a few VA offers because they want a credit from me for the loan.

    As a seller I find all government loan programs to be clunky, chock full of paperwork and typically they want money from the seller.

    • Elizabeth Colegrove

      I honestly have not had an issue with a VA loan when we used it twice regarding the seller. It is true that some sellers find it less appealing. Personally I simply offered a higher Ernest money and tighter contract.

      As to having the seller paying the loan. I am slightly confused by your meaning. I love the fact that I can have a 100% finance loan. While it has some costs (funding fees etc) for me the liquidity and ability to use someone else’s money and the lower rate made up for .

    • Elizabeth Colegrove

      The purpose behind the VA loan is to use it as your personal residence. They have residency requirements, check orders and other requirements to make sure you are fullfilling these requirements As @Brendan mention above there are some loop holes. That being said, I personally have bought all of our VA properties as a personal and than rented it out after fulfilling the residency requirement.

  6. Jacqueline Ragnone

    Hi Elizabeth-such an informative post for me! Can you use this method of a 2nd home purchase to refi the second home from a conventional to a VA loan? I’m wondering if I can get a better rate or restructure to lower payments using a different product other than the 30-yr conventional I used earlier this year.

    • Elizabeth Colegrove

      Honestly I personally wouldn’t refinance from a conventional to a VA. Most people do it the other way because they can use it again. In my mind the higher costs of the loan are not worth the lower payment once you are in the loan. Again I would run all the numbers, and talk to a broker. I have never done that so I couldn’t give you any personal experience. I have only investigated the opposite way.

  7. Zachary Rec

    Great story, I hope to follow! I bought a 2 unit multi-family in February when I realized my active reserve time brought me into eligibility early 🙂 I just moved a tenant into the 4 bed 1.5 bath upstairs for 1125/mo, my mortgage (VA closing rolled in) is 951/mo. Living for better than free!

  8. Dennis Roper

    Great post, I have used my VA many times (I usually flip those) but was unaware if I didn’t max it out I could use the remaining portion for other loans. Possibly makes my strategy for my pending move this summer different loan wise.

    BTW, glad to see you got a decent priced house in Lemoore/Hanford. I was there at the height of the market and had many buddies telling me I was a bad real estate investor because I did not want to buy a 3/2 track home for $500k!

  9. Scott Grover

    This is great information! I’ve had two VA loans, one is paid off and the other home is rented. Currently looking for a multi-family but was wondering how to finance it since we don’t have a down payment. So this article is rather timely. Thanks!

  10. Michael Strobel

    Thank you so much for putting this together! This is a really informative guide for me as i really want to use my VA loan in order to jump into RE investing. One question I have for you is about financing. Im in an small market where with my current job I can only qualify me for about $140k-$150k. While this could get me a duplex it might not be as feasible getting a triplex or 4 plex (they go for about $220k-$250k.) Obviously (at least in my mind) a 4 plex is the way I would want to go to start REI with my VA loan. That offers More units which equals more cashflow. But I saw you mention in the guide that you can use the rents from the other units as income which allows you to qualify for a higher loan amount. Could you expand on that a little more please? Are lenders really willing to take my income (from my job) and add the rents of the property I want to purchase?

    Just to make sure I understand the concept…For example if Im looking to purchase a 4 plex that rents for $750/unit…$750 x 3 rentable units=$2250 x 12 months=$27k. Banks will take that $27k and add my job income to that and I can qualify for a loan based on that amount?


  11. I am eligible for a VA loan and am currently searching for a multi family. I am also in California about 2 hrs north of you!
    Can you recommend a broker/lender familiar with VA lending?

    Thank you for the article, it was very informative and inspiring!!

  12. I am no longer active duty but am very intrigued with the option of spousal occupancy due to employment for purchasing at a distance. From what I have researched, this may rely on the subjectiveness of the VA approval officer?

  13. Lee Lim

    Thanks for the article in looking at different avenues to leverage this benefit. Your perspective on PCS’ing and actually turning it into a positive return for your family is inspiring. Although I’m not active duty anymore, I haven’t nearly reached my entitlement cap so I now have some additional parameters in my investment prospects! A.K.A. More late nights learning about REI when I probably should be sleeping!

    And thank you for YOUR service!… Military guys get the thanks all the time. Thank YOU for your service to one of my brothers so that he can keep a clear head at work!

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