VA requirements

VA Minimum Property Requirements for Multi-Family Units

January 2, 2019

author:

VA Minimum Property Requirements for Multi-Family Units

053VA loans aren’t just for single family dwellings — did you know there are VA loans available for properties with up to four units?

The borrower must certify he or she intends to live in one of those units as the primary residence and the property cannot have more than 25% of the floor space dedicated to commercial use, but multi-family units are an option under a VA home loan for qualified borrowers.

Naturally, VA minimum property requirements are different for buildings with more than one unit — after all, the living conditions require different considerations than for single-family dwellings. The VA has rules that insure the privacy and accessibility for each unit on the property; for example, all utilities must be kept separate.

There are some exceptions for this rule for flexibility’s sake. The VA lender’s guide states “Utility services must be independent for each living unit” with the following exceptions:

Living units under a single mortgage or ownership may share water, sewer, gas, or electricity as long as there are separate service shut-offs for each unit,

Living units under separate ownership may share connections from the main to the building line when those connections are protected by

–  easement or covenant, and

–  a maintenance agreement acceptable to VA.

The minimum property requirements for utilities also include a rule stating that, generally speaking, those utilities can’t pass “over, under or through” any other unit without “a legal provision for permanent right of access for maintenance and repair of the utilities without trespass on adjoining properties.”

VA minimum property requirements do allow for some shared spaces on the property–the building can have a common facility for laundry or storage, and heating equipment for all units can be co-located. But when it comes to the individual privacy of each unit, VA minimum property requirements are clear — each one should be a completely separate and self-contained space from the rest. Properties that require one tenant to pass through another tenant’s space to reach their own dwelling, for example, would not meet VA standards.

Specifically, the VA Lender’s Handbook says, “Access to the living unit must be provided without passing through any other living unit. Each living unit must be able to be used and maintained individually without trespass upon adjoining properties.”

11 Comments
  1. Ruby

    Thanks for posting this article! So I am trying to understand this - would the VA home loan cover buying an entire multi-family structure, and not just the one portion you intend to occupy?? Would you then be free to rent out the other unit(s) or have extended family live in? I am starting to consider buying a place. I live in south Texas and inside the city, much of the older (pre 1945) housing stock is two-family duplexes, due to the Hispanic tradition of multigenerational dwellings. Not only are these houses more traditional to the area, they are also more efficient from an energy and land use standpoint. Younger people like myself often prefer urban and more densely populated mixed-use neighborhoods. It would be great if when my mother retired, she could come and live with me, but still keep her independence with separate living space. In the meantime, I could rent out one unit for some extra income. I'm looking forward to hearing back.

    • Joe Wallace

      Hi Ruby, thanks for asking--a qualified veteran is allowed to buy a 1 to 4 unit building if it meets VA loan requirements. The veteran purchases the entire structure and has an option to apply for a joint loan with another veteran using one or both VA loan guaranty entitlements. Vets who buy with non-vets have only the veteran's portion of the loan covered. As with any VA loan, the borrower must certify he or she intends to live there as the primary residence. Hope this helps!

  2. Ruby

    Thanks, it does:).

  3. Will

    Hi Joe,here are my questions, I am wanting to buy a multi-unit home. What is the max number of units I can purchase? What is the max number of bedroooms/bathroom that can be in each unit? I read also that if I qualified, I could received up to 15 loans totaling up to $100 million dollars? How difficult is it to achieve that? I am thinking of going that route if I am able to qualify and be able to help my fellow Vets. I live in Los Angeles, so I figured why not. Thanks, Will USMC

    • Joe Wallace

      The VA allows loans on multiple unit properties up to four units. Not sure what program you mean for the multiple loan portion of your question. I am unaware of such a program for VA single family home loans--VA loans have an occupancy requirement.

  4. Omar

    I'm trying to purchase a 3unit and live in one. I don't have any property management experience can I still qualify for a va loan for this property? Does it only apply if a buyer intends to use the rental income to qualify?

    • Joe Wallace

      You would need to show previous property management experience and have cash reserves if trying to use rental income to qualify for the loan.

      • nick

        Can you sign a contract with a property management company to manage the rental units in lieu of the landlord experience requirement?

        • Joe Wallace

          As I understand the VA loan rules, there isn't a provision for that, but that doesn't necessarily mean the lender will automatically reject the arrangement. Best advice--discuss it with the lender and/or the VA directly by calling 1-800 827-1000.

  5. Bob Gagnon

    Joe -- thank you for the straight factual article. One question I would ask is the following: I am looking at a property with 4 separate units (basically small homes) on acreage with two barns. I would live in one and likely family would occupy the others. They are all well separated with separate utilities (at least 100 feet apart). Would this be something the VA would do as long as I qualified for the loan part? Second question, if family occupied two units and we rented the other two would that complicate matters at all? Thank you in advance for any help. It is refreshing to find someone online who is willing to give some of their time to help others. BobG

    • Joe Wallace

      VA does make some exceptions for multiple buildings, but this is handled on a case-by-case basis--the rules basically state as much. You'll need to discuss the specifics with a loan officer and the VA to see if your situation would qualify for the exception.

Leave a comment

Your email address will not be published. Required fields are marked *