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Like most government-backed loan products, VA loans focus on helping homebuyers purchase primary residences, not vacation and rental properties. The VA enforces this through VA loan occupancy requirements, with notable exceptions for certain rental properties and streamline (IRRRL) refinancing.

Key Takeaways

  • The VA loan requires buyers to occupy the home they purchase.
  • It's possible to have a VA loan for rental property, such as duplex or four-plex, if the borrower occupies one of the units.
  • Occupancy scenarios vary by the borrower. Contact a VA lender for your specific circumstances.
  • IRRRLs do not have occupancy requirements.

VA Loans and Primary Residences

VA loans come with a primary residency requirement. That means VA borrowers must certify they intend to occupy the purchased property as their primary residence after closing. So, if you're looking to purchase a vacation home or plan on renting the entire property, this isn't the program for you.

However, if you're considering a multi-unit property, the VA's occupancy requirements may allow it.

Using a VA Loan for Rental Property

It's possible to use a VA loan for a rental property if the purchased property is a multi-unit property and you intend to occupy one or more of the adjoining units.

VA 60-Day Occupancy Window

VA borrowers must either personally live in the property as their home or intend to move into the property and use it as their home within 60 days of the loan closing.

This two-month moving window is "reasonable time," according to the VA.

The VA can extend that 60-day window in some cases. Borrowers may want or need more than 60 days to move in because:

  • Military retirement is within 12 months of the closing date;
  • Employment or military service prevents moving in within 60 days;
  • The home requires repairs after closing.

Spouses and Occupancy

For married active-duty service members, a spouse can fill the occupancy requirement. The same can be true for married Veterans working overseas as contractors or in other capacities.

Things can be more difficult for single civilians working overseas or for married Veterans trying to buy a home in another part of the country while staying in the old locale for work related reasons.

Work and VA Loan Occupancy

In instances where your job keeps you from home for extended periods, the VA is fairly flexible. You don't need to be at your house every day to satisfy occupancy requirements, but you are expected to be there for a reasonable amount of time.

If your employment requires absence from home for a substantial amount of time, the following two conditions must be met:

  • The Veteran must have a history of continuous residence in the community and,
  • There must be no indication that the Veteran has established, intends to establish, or may be required to establish, a principal residence elsewhere.

Those are just a few examples. Occupancy situations vary on a case-by-case basis, so talk with a VA lender about your particular circumstances.

VA Loan Refinancing and Occupancy

For Interest Rate Reduction Refinancing Loans (IRRRLs), or VA Streamline loans, the Veteran need only certify that they previously occupied the property as their home. A VA Cash-Out refinance will require the borrower to certify occupancy to be eligible for refinancing.

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