Can I buy a second home with a VA Loan

 

Yes, you can buy a second home with a VA Loan!

However, there are a lot of extra criteria that going into that answer.

The VA home loan is designed for the purchase of the veteran's primary residence, and in theory, you are supposed to have only one VA loan at a time. But as with so many things in life, there are some exceptions to the basic rules.

First let's understand the difference between having two VA loans, and buying a vacation type second home, or investment property with a VA loan. The following are basic examples of how a person can end up with two VA loans, while still meeting VA Loan occupancy requirements.

Two VA Loans At Once

Many people can end up having two VA loans at once.

1) Because VA loans are assumable, you may possible have let someone assume your existing VA loan, and use your benefits again to purchase another primary residence.

2) Because active military families tend to move a bit more often than others, you can potentially have two VA loans at the same time, as long as you plan on occupying the second home within one year.

This is a common issue when you are trying to buy your new home, when your existing home with a VA loan is not yet paid off, or maybe you plan on keeping the existing home, possibly turning it into a rental.

A Vacation Type Second VA Loan

Officially, no, you can not purchase a true second home with a VA loan, unless you can fully document you'll be living in the home at least 6 months of each year.

or

If you are buying a second home with the intention of moving there when you retire. Normally on a VA loan, you must move into the property within 60-days after closing. But if you are on active duty, and will retire within one year, that will work.  Note that your married spouse (not just a boyfriend/girlfriend) is able to move in to meet the requirement if you are on active duty. 

Investment Property With A VA Loan

Because your VA benefits are for the purchase of your primary home, using a VA Loan to purchase an investment property / rental property is not allowed.

But, you CAN use a VA loan to purchase a multi-unit property (up to 4-units) as long as YOU LIVE in one of the units. The VA allows us to give your 75% of rents to use for income qualifying.  You'll generally need to provide leases.

You'll also generally have to prove you have at least 6 months worth of reserves left over in the bank after closing. This means at least 6 months of the properties mortgage payment.

Can You Qualify For Two VA Loans?

This is a much bigger question for most people.

There are two major criteria to be award of. First is that regardless of what type of loan you are getting, you will always have to income qualify for both house payments.  Simply put, can you afford both homes.  Even if you are planning on selling the current home, lenders still need to take the payment into consideration.

The second main criteria is do you have any remaining VA entitlement left. The VA entitlement is the amount the VA will pay the lender if you default.  Your VA Certificate of Eligibility (COE) shows lenders how much eligibility you have, or how much is remaining if you currently have a VA loan.

Calculating your remaining VA entitlement gets a bit complicated. We suggest simply contacting your Cambria Mortgage VA Loan expert at (651) 552-3681 for help determining your qualifications.