Purchasing 2nd home with VA loan while keeping my first.

[Kyle Ryan]

Hi BP world! Any input or assistance would be greatly appreciated!

I currently own and reside in a 2 family home in Bergen County NJ that I purchased with a VA loan in May of 2019. I refinanced using the irrrl program from 3.99% to 2.75% this past summer. I was told by the VA that I have $400k of entitlement but my loan officer said that I have $500k. (I'm thinking the VA would know better). I'm pretty sure that you have to refinance out of your original loan in order to renew your entitlement. I'm not sure if the irrrl qualifies because it is still a government backed loan.

The VA told me that I must have tenants for 2 full years before I can use their rent as qualifying income. You can also use potential income from a future property towards your income if you have a lease in place before the sale. I believe you are able to use 75% of rental income to qualify. My current home will cash flow around $1000 once its fully rented. 

I know that you have to go online and fill out a form to renew your entitlement and give your reasons for wanting to do so. Typical reasons would be a duty station or job transfer or needing a bigger home for expanding family. This is where it can get tricky because they can deny you if you don't have a legitimate reason.

I plan on purchasing another multifamily home once I pass my 2 year mark in May. I have been doing a ton of research on this topic but I often get conflicting answers. I'm more than happy to share what I've learned thus far and update my progress on the new purchase.

Please don't quote me on any of this info but im confident that most of it is accurate as I have gotten it directly from the VA.

I would love to hear from someone that has successfully purchased a 2nd home while keeping their first with the VA loan or anyone that has any experience at all.

Thanks so much everyone!