VA Loans and Occupancy Issues

Movers moving furniture
U.S. Coast Guard photo by Petty Officer 3rd Class Jonathan Klingenberg

A VA loan can only be used to finance an owner-occupied home and cannot be used to buy a rental property or vacation home. When you first apply for a VA home loan there is an area on the application where you indicate you’re applying for a VA mortgage as well as a space showing you’ll be occupying the property. But are there any instances when you can use a VA mortgage to buy a home and not move in right away? Actually there are, but there are some things you need to know in advance before making that offer.

The VA requires occupancy within 60 days of your settlement yet lenders can require their own occupancy requirement and most set this time frame at 30 days. If your situation is more than 30 days speak with your loan officer regarding your situation. It may be that you simply can’t move in because the sellers have yet to move. Perhaps their new home they’re buying is being delayed. Maybe the home they’re buying also has some tenants who can’t move within 30 days. With this information and certification from the sellers a lender can make an exception.

Are you being deployed? Will you soon be on active duty far, far away and can’t occupy the property? There are exceptions to the VA 60 day rule set aside for deployment. If however your deployment will take longer than 60 days there can be an exception of up to 12 months if you’re active duty and cannot physically live in the home being purchase. This is a relatively rare event however but with proper documentation of your deployment and signing an intent to occupy statement you may still close on your property and meet the occupancy requirements. However, a spouse can fulfill the occupancy requirement if you’re deployed and the spouse doesn’t have to have VA home loan eligibility.

Finally, if someone with a home financed with a VA loan who decides to keep the home and buy another primary residence at least 12 months after the settlement date, the occupancy requirement is fulfilled. Moving out does not affect the existing VA home loan terms.

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VA Loan Home Ownership