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.