VA Loan Occupancy Requirements

 

VA loans, like the majority of government-backed. Credit products, concentrate on assisting homebuyers in buying primary residences rather than second homes and rental properties. VA loan occupancy criteria are used to enforce this, with noteworthy exceptions for some rental properties and streamline (IRRRL) refinancing.

Key Takeaways

  • The VA loan stipulates that purchasers must live in the property they buy.
  • If the borrower lives in one of the rental units, such as a duplex or four-plex, a VA loan may be available.
  • Different occupancy possibilities depend on the borrower. Inquire with a VA lender about your particular situation.
  • There are no occupancy limitations for IRRRLs.

VA Loans and Primary Residences

There is a primary residence requirement for VA loans. Thus, VA borrowers are required to declare that they intend to use the bought home as their principal residence following the closing. This program is not for you if your goal is to buy a vacation home or if you intend to rent out the entire property. The VA’s occupancy guidelines, though, can permit it if you’re thinking about buying a house with many units.

VA 60-Day Occupancy Window

VA borrowers are required to directly reside in the property as their primary residence or to have plans to do so within 60 days of the loan closing.

According to the VA, this two-month relocating window is “reasonable time.”

In exceptional circumstances, the VA may extend that 60-day limit. Borrowers can need or wish to extend the 60-day moving in period because:

  • military retirement occurs within a year of the deadline;
  • Moving in within 60 days is impossible due to employment or military duty;
  • After closing, repairs are needed on the house.

 

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Spouses and Occupancy

The occupancy requirement can be met by a spouse for married active-duty military personnel. Married Veterans who work as contractors or in other positions abroad may experience the same thing.

Single civilians working abroad or married veterans looking to buy a property while living in the former location for work-related reasons may find things more challenging.

Work and VA Loan Occupancy

The VA is rather flexible in situations when your employment requires you to spend a lot of time away from home. You are expected to be at your home for a decent period of time, even if you are not required to be there every day to meet occupancy standards. The following two requirements must be satisfied if your job necessitates frequent absences from home:

  • The Veteran must have lived in the neighborhood consistently in the past and,
  • There may be no sign that the veteran has made another place their permanent residence, has plans to make another place their principal residence, or would need to make that move.
These are but a few illustrations. Each occupancy scenario is different, so discuss your specific issue with a VA lender.

VA Loan Refinancing and Occupancy

For VA Streamline loans or Interest Rate Reduction Refinancing Loans (IRRRLs), the Veteran merely has to attest that they had previously lived in the property. To qualify for a VA Cash-Out refinance, the borrower must confirm occupancy.

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