Refinance out of VA loan to a FHA loan to house hack

[Ryan Owens]

Hello, I currently live in a 3/2 home financed on a VA loan. My wife and I have 2 kids 3/1. We need more space maybe a 4/2 or 4/3. Would it be smart to refinance out of the VA loan into a FHA loan. Live in it for a year or so, then use my VA eligibility again to buy my family home. The home I am currently in would become a rental. Is this a smart way to get into the real estate investment business? The cheapest 3/2 rents in my city at 1300.

[David Kelly]

@Ryan Owens

Hi Ryan, I would need some more information. There is still a possibility to use your Entitlement for a new VA purchase loan keeping the current one you have with a down payment.

If you have a down payment it's a lot better program to go VA as there is no upfront or monthly MI, rates are better and a higher LTV depending on what entitlement was already used for your current VA home.

Another option is to refinance your current home into a conventional lawn and use your VA 100% financing for the new home.