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Selling a Home Purchased With a VA Home Loan

Some of our reader questions involve the ability to sell the home. Does having a VA guaranteed home loan restrict the borrower from selling the property?

VA officials are asked this often enough to include it in a list of frequently asked questions about VA loans. Here’s the official word from the Department of Veterans Affairs at VA.gov:

“Q: Does having a VA loan limit a veteran’s right or ability to sell the property?

A: No. A veteran may sell the property to a veteran or non-veteran at any time. However, if the loan was closed after March 1, 1988, and it will be assumed, the qualifications of the assumer must be reviewed and approved by the lender or VA.”

The ability to sell a home purchased with a VA mortgage without restriction is one reason why some condominium projects aren’t approved for VA loans. Any condo project that restricts the sale of the property is in contradiction of VA loan policy and therefore would be ineligible for a VA loan. VA borrowers must be free to sell their home at any time to any qualified borrower or purchaser.

There is one instance where the borrower is not free to simply arrange the sale and close the deal. In situations where the borrower wants to arrange a short sale, he or she must discuss the issue with the lender first. A short sale involving a VA guaranteed mortgage must have the lender’s approval. If the lender does not agree, the short sale cannot proceed; this is due to the potential loss the lender could take on the deal.

Short sales also have a negative impact on the borrower’s credit and future ability to purchase a new home–they should be carefully researched before a commitment is made. You can learn more about VA loan eligibility following a short sale or contact the VA directly for more information at 1-800-827-1000.

Do you have a question about the VA home loan process? Ask us in our comments section.

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About Joe Wallace

Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association.

2 Responses to Selling a Home Purchased With a VA Home Loan

  1. andrew j. boyer SPC says:

    We are a homeowner for going on three years. we used a VA approved loan through wells Fargo and received the 8k back. I am now being medically retired and wife has a job in another city. We are wondering can we sell are home to another individual as long as we pay our loan amount off, and not have to pay back anything such as 8k. Do we have to occupy the residence for a certain amount of time prior to selling? If we cant sell yet, our we aloud to rent home until allowed to sell. Would we be eligible for another VA loan if we have proof of renters. Basically what do we need to do to sell home and be able to purchase new home in Houston.

    • Joe Wallace says:

      VA borrowers are not restricted from selling the property when they wish to sell. You are obligated under the primary occupancy rules until you sell or refinance, however. Under what program did you get 8k back with your loan?

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