If you’ve utilized a Veterans Affairs loan to buy a house in the past, you know what amazing perks they have:
- low-interest rates,
- no mortgage insurance,
- and, probably most significantly, no down payment.
Local and state authorities frequently even provide property tax exemptions to deserving veterans. Whether you intend to buy a new house soon and you’ve previously utilized a VA loan for a prior home purchase, you may be wondering if you can take out another VA loan.
Is there a limit on how many times you can utilize a VA loan?
1. An Existing Residence
For condominiums or townhouses, the whole complex must be authorized by the VA and be authorized as VA-approved homes before the buyer may get a loan for one unit.
A borrower must be a Veteran or a current military member who satisfies specific qualifying conditions depending on service. National Guard and Reserve members may qualify for a VA loan, as well as surviving spouses of a Veteran or a Veteran lost in action or imprisoned as a prisoner of war. This restricts the amount of money you may withdraw without putting your own money down.
We’re going to discuss how difficult it is to identify when you should make a down payment and how to estimate the amount of the down payment.
2. A Multi-Unit Property
VA home loans are accessible to people who have served our nation in the military services and, in certain situations, their surviving spouses. There are several various kinds of VA loans, and they come with numerous perks, chief among them being that you don’t need to make a down payment to acquire a house. Because the down payment is generally the largest impediment to homeownership for borrowers, particularly first-time home purchasers, VA loans may make homeownership much more affordable for those who qualify.
3. A Manufactured (mobile) House
Obtaining a lender to finance these sorts of houses might be tough since they’re considered depreciating assets; however, modular homes are more likely to appreciate — making finding a loan significantly simpler. Additionally, manufactured, and modular homes must adhere to certain requirements, such as being permanently attached to a foundation.
Generally, a lender will ask that any rental income claimed to be substantiated by bank documents indicating the amount of rent collected each month or by an appraiser determining the property’s fair market rent. Additionally, a borrower may be required to maintain cash reserves equal to six months’ worth of mortgage payments and property operating expenses.
4. A Whole New Structure
However, builders, blueprints, and construction sites must be VA-approved, subject to several inspections, and provide a one-year guarantee. Additionally, many lenders are unwilling to finance new builds with no down payment. Alternatively, veterans may get a non-VA house loan and then refinance with a VA home loan after the structure is completed.
A single-family house may also be eligible for VA financing if it includes a separate rental unit, such as a detached garage turned into a studio apartment. Income from a detached rental unit in a single-family house – such as a detached garage converted into an apartment – or from units in a multifamily property may assist a borrower in meeting the lender’s income criteria for a VA loan. As a general rule, most lenders will credit 75% of the rental income generated by the financed property against the borrower’s overall income.
5. Energy-Efficient Improvements
Thermal windows and doors, furnace adjustment; heat pumps; and vapor barriers are all examples of improvements.
The property must be used as the borrower’s principal home. However, a borrower may be able to “house hack” by renting out a room in a single-family home, a separate apartment on the same land, or a unit in a multifamily property that is not owner-occupied. The VA provides a one-time reinstatement of full entitlement for homeowners who have repaid their VA loan but continue to own the property for which the loan was utilized. This is useful if you’ve paid off your VA loan and now own your house entirely or if you’ve refinanced your VA loan into another loan type, such as a conventional loan.
Veterans with a VA-approved disability are exempt from the VA funding fee. Additionally, you are not required to pay the financing fee if you are a surviving spouse, which means your spouse died in action or as a consequence of a service-connected injury. Finally, soldiers who return to active service after winning a Purple Heart are exempt.