Investment property is a great way to earn additional income and secure your financial future. So, it should come as no surprise that many veterans are eager to invest in real estate by purchasing rental properties.
The VA home loan program does offer an opportunity to assist veterans with the purchase of these properties, but there are conditions and stipulations. If you are a veteran who wants to use your loan options for this purchase, here are some important details you must know.
Occupancy Requirement
The most important thing to remember about the loan is that it's an incentive. The government wants to ensure it is being used for its primary purchase, which is to make it easier for veterans to purchase housing.
Therefore, a large part of the occupancy requirement is that you actually live in the home. Veterans are required to live in the house for a specific period.
If you are married and your spouse will live in your home, on active duty, or deployed, some of the guidelines concerning the requirement will change. Only after the occupancy guideline is fulfilled can the property be used for investment purposes.
Loan Limits
The VA home loan program is unique because it is backed by the federal government. For this reason, obtaining a VA loan is often easier than obtaining a traditional loan, because the money a lender grants you is guaranteed.
For this reason, the government does set limits on the amount of money they will back for a loan. However, the most important thing to remember about this factor is that it is veteran-specific, not loan-specific.
For example, assume a veteran qualifies for a $425,000 loan. Assume he or she already has a VA home loan for $175,000. If he or she applied for an additional loan, the government would not offer them another loan for $425,000; the individual would instead only have $250,000 of funding left. So, if you want to purchase a rental property, remember that you will still be held to the initial loan limit.
The VA home loan program is an excellent opportunity for well-deserving service members; however, to say that the program is not complicated at times would be false. Any person looking to use this loan is encouraged to speak with a specialist who can give them feedback about the program, as well as any factors that might affect them personally. Make sure you talk with a loan specialist as soon as possible.
For more information, reach out to companies like VA Loan Lending.
Share11 November 2018
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