VA guidelines

VA Occupancy Requirements

August 31, 2010

VA Occupancy Requirements

VA requirements for getting approved for a VA mortgage include something called the Primary Occupancy rule—something I’ve touched on in previous blog posts. In a nutshell, VA requirements include the borrower living in the home as their main residence. That’s why you can’t use a VA loan to buy a summer home or a property you intend to rent out to others. But there are exceptions to the rule.

If you’ve purchased a multi-family unit, you’re allowed to rent out the other units on the property so long as you live full-time in one of the units yourself. Have you purchased a condo or a duplex? The same rules apply. The VA doesn’t have an issue with the renters themselves and there’s no rule against having paying roommates or lodgers. The primary issue is where the borrower lives.

Some people get concerned about the primary occupancy rule because they are frequent travelers. Can you travel full-time and still be in compliance with the primary residence clause? I believe the answer is yes—conditionally. If you have proof of residency—utility bills, local insurance, etc. you should have no problem convincing the Department of Veterans Affairs that the property IS your main address. The problems often start for those who might own property in another area…or try to purchase property elsewhere.

For VA homeowners who are also frequent travelers, this isn’t an issue. For those who DO own property elsewhere, it could cause problems when trying to buy a home with a VA guaranteed loan unless you can show the other property you own isn’t your primary address. Do you have renters in these other properties? That’s probably the best way to prove you aren’t trying to game the system. Another way is to furnish proof that your new home is indeed your intended primary residence—your driver’s license, memberships in local organizations and even voter registration cards could go a long way towards establishing you as a permanent resident in the area for VA
loan purposes.

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