VA Loan Basics & Occupancy Requirements

Core Basics of the VA Loan

The VA loan is arguably the most powerful mortgage product available, but it comes with specific guidelines that every veteran should understand. Here are the fundamental basics of using your VA home loan benefits.

1. No Loan Limits for Fully Entitled Veterans

As of 2020, there are no loan limits for veterans with full entitlement. This means you can borrow whatever a lender is willing to approve based on your income and credit, with absolutely zero down payment. If you have an existing VA loan or have suffered a foreclosure, you may have partial entitlement, in which case county loan limits do apply.

2. Refinancing is Allowed

You can refinance an existing VA loan. The VA offers the Interest Rate Reduction Refinance Loan (IRRRL) for lowering your rate, as well as Cash-Out refinance options if you need to tap into your home's equity.

3. Owner-Occupied Only

A VA loan is intended for primary residences only—it cannot be used to purchase a dedicated investment property or vacation home. However, there are nuances to this rule:

• 60-Day Rule: You must generally occupy the home within 60 days of closing.
• Spouse Certifying Occupancy: If you are deployed or unable to occupy the home immediately, your spouse can fulfill the occupancy requirement.
• Intermittent Occupancy: If your job requires you to travel frequently, you may still qualify as long as the home is your primary residence.
• Converting to a Rental: You must intend to occupy the home at the time of purchase. However, if your circumstances change later (e.g., you receive PCS orders 6-12 months down the line), there is no limitation on converting the home into a rental property.

4. Credit and Liabilities Matter

While the VA does not set a minimum credit score, lenders do. Your credit history, debt-to-income ratio, and residual income will be carefully evaluated to ensure you can comfortably afford the mortgage payments.

Understanding these basics ensures you are fully prepared to leverage your hard-earned benefits. If you have questions about occupancy or your entitlement status, contact Garcia Vet Homes today.

Ready to execute your real estate mission?