Principal residence requirements

[Jeff Frankenfield]

Hi everyone, I am a veteran and would love to use my VA Loan to buy a multi-tenant dwelling unit in Texas, keeping one of the units as my own for when I am in town and renting the other ones out. I currently rent my place in California (so I don't own a principal/primary residence currently) and can't move as I have kids in school here, etc. My VA Loan limit isn't high enough to buy property where I live so I am looking out of state for options. I have the ability to travel to Texas as often as needed for work, etc. and can bring the wife and kids out for the entire summer. But, during the school year it would pretty much be me going to Texas to work, begin real estate investing, flipping, etc. - the point is I could be there a lot, just not sure how much yet. I believe the VA Loan can only be used to purchase a primary residence. Given that I currently rent in California, could whatever I buy in Texas be considered a primary residence since it is the only property I would own? I doubt it but want to ask anyway. Any idea what the minimum requirements are to claim something as a primary residence? My understanding is that it is vague and you just have to "spend most of your time there" - which I could do, but my kids would still be in school in California, so not sure if that automatically makes my California place that I rent my primary residence. Thanks for the feedback, guidance, and recommendations. -Jeff

[Jesse Hinaman]

@Jeff Frankenfield There is no loan limit with VA. Depends where you live, but for my California county, Anything above $475k ($474,950 to be exact) is considered "Jumbo VA". You still get 0% down up to the county limit with the VA guarantee, and would need to put down $0.25 for every dollar above that.

For example, if you bought a home in my county for $600k, the first $475k will require 0% down. The remaining $125k would require 25% down ($31,250). That's only a little over 5% down on a $600k purchase, which is much less than a typical jumbo loan. Add to that the fact that VA has no mortgage insurance and rates on a 30 yr fixed are currently in the low 3's gives you an incredible opportunity.

I highly doubt an underwriter would approve a VA loan for a part time residence in Texas, while your family is in California.

If you want more info on your VA options. Shoot me a message.