If you’re applying for a VA home loan, you may wonder what occupancy requirements entail. Does it mean only I can live there? How long do I have to live there? How do these rules affect me if I want to move out of state or rent my house? Our quick guide to VA loan occupancy requirements will answer these questions.
VA Home Loan Occupancy Rules
The first thing to know about VA home loans is that the property you purchase must be a primary residence. Vacation homes or rental properties don’t qualify for a VA home loan, as they are secondary homes. The VA also states that homebuyers must move into their purchased home within sixty days of closing.
Did you buy a fixer-upper? If your move-in date is delayed due to home improvement projects, it is deemed “delayed," and you must state that you will move in as soon as the work or repairs are complete.
If you are on duty or otherwise away from your primary residence, your spouse can meet the occupancy rule on your behalf. This may also apply to dependents living in the home in some circ*mstances.
Common Questions About The VA Loan Occupancy Requirements
How Long Must I Live At The Property?
Although there is no set required time for occupancy, a borrower must intend to live in residence for at least 12 months.
Can I Buy A New Home And Rent Out My Old One With A VA Loan?
If you have lived at your existing home for at least 12 months or moved to a new duty station, you may rent your property to a tenant.
Who Checks Occupancy?
If there are no suspicious circ*mstances, it is up to the lender to determine occupancy. There are no VA police going door to door verifying the occupancy rule was met, although rare a lender can order an occupancy check if they want to.
Do VA Loan Occupancy Requirements Apply For Refinancing Loans?
Sometimes. A VA cash-out refinance requires a new appraisal, a credit check, and for the borrower to certify occupancy.
The VA Interest Rate Reduction Refinance Loan, also known as a VA Streamline Refinance, requires less effort. This type of loan only requires the borrower to certify that the home was their primary residence during the first mortgage.
VA loans are made to veterans and eligible service members who intend to use the home they're buying as their primary residence. The lender has to verify that you intend on using the home as your primary residence before making the loan. The lender will typically ask you for a letter verifying your intention to occupy the property.
After one year of occupying the home you can plan to rent your property and hold it now as an investment property. You cannot use VA financing for investment properties or second homes. However, after living in the property for the required amount of time, you can use the home as you see fit and rent it out or sell.
Did you know that VA Loans are mortgage loans available exclusively to Veterans and military families? And did you know the benefits the VA Loans offer includes $0 down payments, no private mortgage insurance, relaxed credit requirements, and competitive interest rates?
Military Home Spot Lending is an approved VA lender specializing in VA Home Loans. Learn more about our VA loans here.
I'm an expert in the field of mortgage financing, particularly specializing in VA home loans. With years of experience and a comprehensive understanding of the intricacies of VA loan programs, I can confidently provide insights into the specific aspects outlined in the article.
Occupancy Requirements for VA Home Loans: A Deep Dive
1. Primary Residence Mandate:
VA home loans have a strict requirement that the purchased property must serve as the borrower's primary residence. This means it should be the main dwelling where the borrower lives on a day-to-day basis. Unlike conventional loans, vacation homes or rental properties do not qualify for VA loans, as they are considered secondary residences.
2. Move-in Timeline:
Upon closing the deal, VA homebuyers are expected to move into their new homes within sixty days. Any delays due to home improvement projects are acknowledged, but it's crucial to notify the lender of such circ*mstances and commit to moving in as soon as the work is completed.
3. Occupancy Representation:
In cases where the borrower is away from the primary residence due to duty or other reasons, the VA allows the spouse or dependents living in the home to fulfill the occupancy rule on behalf of the borrower.
Common Questions Clarified:
a. Duration of Residence:
While there's no fixed time requirement for occupancy, the borrower must have the genuine intention to reside in the property for at least 12 months.
b. Renting Out Previous Property:
After living in the current residence for a minimum of 12 months or due to a change in duty station, the borrower is allowed to rent out their property to a tenant.
c. Occupancy Verification:
Lenders play a key role in determining occupancy, and under normal circ*mstances, they do not conduct physical checks. However, lenders have the authority to order an occupancy check if they find it necessary.
d. Refinancing Considerations:
For VA cash-out refinances, a new appraisal, credit check, and borrower certification of occupancy are required. In contrast, the VA Interest Rate Reduction Refinance Loan (VA Streamline Refinance) has more relaxed requirements, with the borrower only certifying the property's primary residence status during the initial mortgage.
Bottom Line:
VA loans are exclusively designed for veterans and eligible service members intending to use the purchased property as their primary residence. Lenders play a crucial role in verifying the borrower's intention to occupy the property, often requesting a letter confirming this intention. After a year of occupancy, borrowers gain flexibility in using the property, such as renting it out or selling it, although VA financing cannot be used for investment properties or second homes.
It's important to note that VA loans offer significant benefits, including zero down payments, no private mortgage insurance, relaxed credit requirements, and competitive interest rates. Military Home Spot Lending, as an approved VA lender, specializes in facilitating VA home loans, providing valuable support to veterans and military families.
VA Occupancy Requirements for Renting Out Your Home. VA lenders need to prove that you plan to use your VA loan to purchase a home as your primary residence, so you must agree to occupy the house yourself for at least 12 months. After that, you can rent out your current home without having to refinance.
The property you purchase with a VA loan must be a primary residence. Second homes and investment properties don't qualify for a VA home loan. And you must move into the new home within a reasonable time frame, typically within 60 days of closing on the house.
When you apply for and close on your VA loan, you'll need to certify to your lender in writing that you'll be using the property or home as your primary residence. You must also agree to move into your new home within a reasonable time – i.e., 60 days after loan closing.
At least 90 days of active-duty service including at least 30 consecutive days (your DD214 must show 32 USC sections 316, 502, 503, 504, or 505 activation), or. 6 creditable years in the National Guard and you were discharged honorably or placed on the retired list.
In general, you'll need to move into the property within 60 days of closing. Additionally, you'll need to live in the property for at least 12 months to qualify as an owner-occupant with most lenders. In contrast, you could obtain financing as an absentee owner.
VA lenders need to prove that you plan to use your VA loan to purchase a home as your primary residence, so you must agree to occupy the house yourself for at least 12 months. After that, you can rent out your current home without having to refinance.
VA loan occupancy requires that the veteran move into the home within a “reasonable time.” But what does that mean? The VA requires that the borrower move into the home within 60 days after the VA loan closes. As you've read, there are exceptions to that rule.
The lender will typically ask you for a letter verifying your intention to occupy the property. After one year of occupying the home you can plan to rent your property and hold it now as an investment property. You cannot use VA financing for investment properties or second homes.
Where you spend the most time. Your legal address listed for tax returns, with the USPS, on your driver's license and on your voter registration card. The home that is near where you work or bank, recreational clubs where you're a member or other family members' homes.
The U.S. Department of Veterans Affairs doesn't set a specific VA loan credit score requirement. Lenders, however, can set their own minimum requirements for a VA loan. Most require a score of at least 620, but some go as low as 500.
Appraisers must note any damage caused by termites, wood-destroying insects, pest infestation, dry rot or any other defects that cause structural issues with the home. The appraiser must look for issues that could make the home less stable and/or put the occupants in harm's way.
If having a low credit score is a concern, a VA home loan could still make home ownership possible. VA does not have a minimum credit score; if one is imposed, it is by the private lender and you can always shop a different lender.
Owner-occupancy refers to the concept of living in the home that you own. It is crucial information from the lender's point of view because if you weren't planning to live at the home you were purchasing or refinancing, you would be classed as an absentee owner.
To figure out an economic occupancy percentage, you divide the amount of rent you collect each month by the gross potential rent you could receive assuming every unit was occupied and paying the market rate. This is multiplied by 100 and expressed as a percentage.
The lender will typically ask you for a letter verifying your intention to occupy the property. After one year of occupying the home you can plan to rent your property and hold it now as an investment property. You cannot use VA financing for investment properties or second homes.
You are allowed to have a co-signer on a VA home loan. But this person must occupy the home with you and either be: (a) your spouse; or (b) a former or current member of the military.
Sec. 36.2-523 of the City Code requires a Certificate of Occupancy to use or occupy any structure or land in which or on which a new use is created or an existing use is changed, converted, enlarged, or moved.
The general rule is that 50% of the units must be owner-occupied, meaning the units aren't rentals or owned by investors. This rule is in place due to the high rental rate of condos. In addition to the 50% owner-occupancy rule, the VA requires that at least 75% of the unit owners are current on their HOA fee payments.
Introduction: My name is Domingo Moore, I am a attractive, gorgeous, funny, jolly, spotless, nice, fantastic person who loves writing and wants to share my knowledge and understanding with you.
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