House Hacking with a VA loan

[Gabi Ashenden]

Hello everyone,

My husband (veteran) and I bought a house last year with a VA loan (0% down), and we lived in it for more than a year. We have been researching our market and are very ready to buy an investment property. We were prequalified for 400K at 8.4% (Ouch!). We have renovated the house we live in, and we put way more into it than we should have, because we didn't think we would house-hack it, and we made it customized to us.

Anyway, we are thinking about renting the house that we live in right now for a year and moving into another house that we will house-hack, probably upgrade it with an intention of renting it in the future, and probably come back to the house that we live in right now. Here's what the loan officer told us: "You still have entitlement left over that you can use if you choose to make this property your primary residence. Long and short, if you were to buy a primary residence at $500,000 you would have to put down 6%.".

What are your thoughts at the moment? I think it's a great idea, but what are the downsides of using a VA loan for house-hacking?