Newbie with access to VA loan

[Sierra Alderman]

Hello everyone, I have been interested in house hacking for some time, but money and a mobile life (husband in the military) has been holding me back. The next place we will be in, Fort Walton Beach, FL, has reasonable house prices and we now have access to the VA loan ($0 down!) A few things, though:

-There are very few/ no multifamily units. 

-We will only be in Fort Walton for a year and a few months before going to the next place.

With VA, it has to be owner-occupied, so as much as I would love to rent it out, I would have to sell before leaving. With no multifamily options, it seems my investment might not be worth it.

A "free" (no down payment, I know there are closing costs to consider) house to start building equity sounds too good to pass up, but the chance of being underwater in a year after buying scares me. Any suggestions? Otherwise I will probably buy out of state with a conventional/FHA loan once I save up enough money. Or wait until a more permanent move.

Thanks for your time.

[Jared Viernes]

Sierra Eberle a few things about the VA loan.

1) You are correct in that you need to be an owner occupant to purchase a home with the VA loan. You do not however have to sell the home when you are given the orders to PCS. In fact, if you haven’t used up all the benefits you can use you “second tier” benefits on a different home in your next move. In places like California, Florida and Hawaii though you normally use up all your benefits. So I’m that case you would need to refinance conventional and apply to reinstate your benefits.

2) Most people don’t understand there is a funding fee requirement on the VA loan; this can be between 2-4% depending on how you earned it and how many times you have used it. This can be rolled into the loan, however instead of being paid for up front.

3) You can ask the seller to pay up to 4% towards closing and loan costs. Often actually paying nothing out of pocket except the initial earnest money and sometimes receiving that back!

4) You can purchase a “distressed home”; but they are notoriously hard to do so. There are certain Minimum Property Requirements the home must meet - the short is that it must be safe, structurally sound, and sanitary; ugly is fine.

My suggestion is, if you are unable to find a good MFH to purchase. Buy a SFH that will work as a rental when you PCS.