Finance 2 Homes Using VA Loans?

One of the ultimate sacrifices that someone can make is risking their life by volunteering in the US Armed Forces.

One of the benefits of being a member of the military, or being a former member, is being able to take advantage of mortgages provided by the Veteran’s Association. VA home loans come with affordable interest rates and typically have lower requirements when it comes to down payment, credit scores, and income levels.

While VA home loans are great financing options, they are generally intended to be used for primary residences only. In no situation is it permitted to use a VA mortgage to buy an investment property or vacation home.

Because of this, it can be difficult to use a VA home loan to finance 2 homes. However, there are some situations when it may be possible to have more than one VA home loan out at one time.

Need for Two Personal Residences

The VA mortgage benefit is available to active members, military veterans, and spouses. In some situations, an active member of the military may need to have a home near an assignment of duty. At the same time, the spouse and rest of the family may need to stay in another area of the country.

In these situations, the VA may approve the family for two different VA home loans. However, this will typically require a special waiver and approval from the VA and the mortgage lender that will be servicing the loan.

Selling a Home

Another situation when you may be able to qualify for a second VA home loan and finance 2 homes is if you are looking to sell one of the underlying properties, but need to purchase another home first.

In some situations, you may need to move into a new home, but will have to keep your old home for awhile.. This can be due to either economic factors, home improvements at the new home, or temporarily living in a different home from a spouse. Like other situations, this case will require special approval and waivers from both the VA and the mortgage servicer.

While there are some situations in which you will be able to qualify to finance 2 homes at once, there are other requirements that can make this more challenging.

One of the challenges of being approved for both loans at once is that you will need to meet the income requirements necessary to pay both loans. When approving a new loan, the VA will do analysis of your global cash flow and loan payment requirements. Based on this, they will want to ensure that you make enough money to pay for both mortgages. Due to income requirements, this can make it hard to qualify for both loans at once.

Another reason why many people do not qualify for both loans is due to down payment requirements. While most VA home loans do not have large down payment requirements, those that would like to buy another property with a VA home loan can be required to have a larger down payment. In some cases, they may require up to 20% down.