In a sense, yes, there’s a commuter rule. But the VA does not explicitly describe distance requirements, leaving lenders to calculate commuter expenses on their own.
Newcomers to the VA loan program often inquire how far they’re allowed to live from a place of employment. VA loan borrowers must intend to occupy their home as their primary residence. Generally, there can only be so much distance between the home and the workplace, at least before it can take a toll on what you can afford.
Chapter Three of the VA Lender's Handbook offers some insights into this question, beginning with the occupancy rules.
"The law requires a veteran obtaining a VA-guaranteed loan to certify that he or she intends to personally occupy the property as his or her home. As of the date of certification, the veteran must either personally live in the property as his or her home, or intend, upon completion of the loan and acquisition of the dwelling, to personally move into the property and use it as his or her home within a reasonable time."
While it's true that the above occupancy rules do not feature any mileage requirements for those who might consider themselves "commuter-owners," the VA rulebook does include a proximity rule.
"The veteran need not maintain a physical presence at the property on a daily basis. However, occupancy as the veteran's home implies that the home is located within reasonable proximity of the veteran's place of employment."
"If the veteran's employment requires the veteran's absence from home a substantial amount of time, the following two conditions must be met:
Lenders consider the cost of commuting—especially by car—when processing VA loans. No two lenders will run the numbers the same way. Usually, lenders will quantify your commutes in miles. The duration might be per week or per month, but lenders may have a miles threshold in a fixed amount of time.
If a borrower’s commute hits that lender’s mile threshold, the lender assigns a dollar amount per mile above the threshold.
For example, if a lender sets a monthly threshold of 2,300 commuting miles, all subsequent miles receive a small dollar value, something like $0.50. This matters because those extra miles can cut into available monthly income and hurt debt-to-income ratios and other qualifying figures.
Borrowers are reminded that a summer or seasonal home does not meet the VA regulations But the VA does allow for what’s known as intermittent occupancy. It's also worth noting that the above guidelines are the VA minimums, and financial institutions could feature more strict controls on how far the borrower can live from work with the home purchased with a VA mortgage?
If you need assistance in this area, talk it over with your lender and with a representative from your nearest VA Regional Loan Center.
