Before you start the application process to get your VA loans and buy your dream home, you need to understand the requirements that come with these loans.
VA Loan Occupancy Requirements
- Borrower needs to be using the property as their primary residence
- Borrower needs to be moving into the residence within a reasonable amount of time after closing
- Active duty, which requires the borrower to be away from the home can be used as an exception
Which documents will you need prove that you’ll be using the property as your primary residence? You’ll want to find out from your lender as early in the application process as possible. By giving yourself a head-start to gather this documentation, you’ll speed up the loan process and eliminate any unanticipated delays down the road.
What VA Loan Requires
If you're looking to purchase a new home or refinance on an existing one using a VA loan, you need to understand the VA loan programs occupancy requirements.
By law, veterans seeking VA loans must verify that they fully intend to live in the home and use it as their primary occupancy. Veterans looking to use a VA home loan to purchase or refinance an investment property or second home will be disappointed. VA loans cannot be used for anything other than a primary residence, meaning veterans will have to look to other loan types to finance such purchases.
VA regulations clearly state that, as of the date of certification, the borrowing veteran must:
- Personally, live in the property as their home, OR
- Intend, upon completion of the loan and acquisition of the dwelling, to personally move into the property and use it as their home within a reasonable time
The only exception to these rules is if the VA loan being guaranteed is an Interest Rate Reduction Refinancing Loan (or IRRRL). In this case, a veteran has been occupying a home purchased with a VA loan but is then transferred to another duty station. At this point, they can rent out the occupying home in their absence. This veteran, based on their prior primary residence status, would also be able to refinance this loan with an IRRRL.
Another exception concerns a borrowing veteran’s spouse. For instance, if the veteran is called into active duty, their spouse can occupy the house in their absence and satisfy the primary residence requirement.
In most cases, however, most lenders consider a reasonable time period to occupy the property to be 60 days, although, in some cases, that time period has been pushed as far as 12 months.
For any questions about occupancy requirements, we recommend that you consult with your lender sooner rather than later. Of course, the most trouble-free course would be to simply plan on using the loan for a home that will be your primary residence and avoid owning any other properties that could be perceived as your primary residence. You might find some lenience with lenders in any case, but it’s best to make your situation as cut and dry as possible.