All Forum Posts by: Jose Jimenez

A VA loan can be great for a owner occupier. just be sure the house can meet minimum VA property standards ( no peeling paint anywhere, no broken windows, fully functional HVAC, water, electric, etc.). Best way is to ask Seller to pay Buyer closing costs in the initial offer contract for a truly zero cost purchase.

Say closing costs in your area are 4% of sale price on average, so offer high enough that with a 4% Seller credit back to pay all Buyer closing costs ( even the entire first year premium of home insurance, any buyer attorney fee, local taxes, local title charges, etc.) the net the Seller will leave with is enough to make them happy. This way it truly will be a 100%  zero cost purchase for you, no down payment paid and no closing costs paid. 

An example might be a house for sale at $100,000  that you would normally expect to pay 95,000 for.  Maybe offer 99,000  with 4000 back from seller to pay buyer closing costs so seller nets the 95,000 they may have agreed to anyway. 

The VA made a rule this year though that a 100% financed VA buyer cannot walk away with cash from any seller tax prorations ( money given to a buyer to pay future property tax bills that really are sellers responsibility). So you cannot walk away with cash any more on a VA deal where seller is paying all closing costs as you could last year. You can get a check back at closing for the earnest money you may give to a seller at offer time but that's it. Anything else extra must go to Principal reduction of the loan size, not cash back to the VA buyer.

There was a VA renovation option where you could add into the VA loan dollars to renovate or repair. But due to Covid the VA is refusing any VA appraisal orders on this type of renovation loan, effectively killing it for the time being until the VA decides otherwise some day. They may feel the VA Appraiser would encounter a bunch of potentially Covid positive rehab workers on site which is not accurate since all rehab work could be done only after closing.

@Jose Jimenez, the only "downside" that I see for VA is the VA funding fee that increases with the second use. The fee varies with percent downpayment used. However, I use quotation marks as the upsides (lower down payment, no PMI, usually better rates, and the ability to rapidly build wealth through house hacking a primary residence) more than make up for it! I house hacked a SFR with the VA loan in Pensacola, FL for over a year, and it was an awesome experience!

@Jose Jimenez I'm not sure there are many downsides, other than dealing with roommates. I'm renting two bedrooms out of my 4/3 residence right now. One is a long-term roommate, and one is a short-term rental. It has been good for me!

You are buying second primary house? You own another currently, or it would be your 2nd time buying one? Either way, if you are owner occupied, you can go VA. They offer a great product.