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Updated over 5 years ago on . Most recent reply
VA Loan
Hey guys, I have a question about the VA loan with a multifamily. I know that I have to live there one year to use the VA loan but what if all the units are occupied at the time of purchase. Is there a window for when I have to occupy a unit or does being fully occupied mean that property comes off the table? Please help! Thanks :)
Most Popular Reply
Truth be told the VA does not enforce occupancy. That being said it is still considered mortgage fraud and you could be held accountable and made an example out of. That is probably highly unlikely to happen. The VA knows it is grey area and a thousand excuses or arguments can be used to justify non-occupancy. Not to mention that the same principle is fairly common with FHA requirements. There are a lot of investors that use low down payment FHA loans for REI. Please understand that I am not a lawyer, this is not legal advice, and I am not advocating or even suggesting to dismiss the occupancy requirements. If you purchase with the honest intent of occupying then I wouldn't stress if things come up and you cannot. The VA has better things to do then to try and arbitrate nonsense. If you flagrantly violate their rules then you deserve whatever comes your way.
The VA loan is a great way for veterans to purchase a home or help build their assets. I have used the VA loan and paid zero, absolutely zero out of pocket at closing. Being creative and negotiating can help you get a good deal. I currently own about a million dollars in real estate that was just purchased with VA loans, with 100% financing, and no money out of pocket. All legally and ethically purchased. There are not a lot of programs that allow you to do that.
The one thing to be careful about is renting out a VA purchased home that was purchased under false pretenses. Insurance will look for any reason to deny your claim. If you move renters in and you have never occupied then you will get burnt if you need to file an insurance claim. Committing fraud is cause for termination of an insurance policy. That may even lead to criminal charges.
Buy, occupy, rent, refinance, repeat. It is the VABORRR method and it requires nothing out of pocket if you do it right.
Considering most vets delay college to serve their neighbors I think it is a fair trade off.