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VA home loan (limits)

Veteran

chris knebel Haymarket, VA

Thank you for reading, just have some VA home loan questions:

1. Say I purchased a property with a VA home loan. Is there an established wait time before I can buy my next property with the VA home loan (i.e. need to wait a year or longer)?

2. Is there a limit to the number of times I can use the VA home loan?

3. Is there an established limit on the outstanding loan amount I can have at one time?

Thank you!

7 January 2021 4 replies Small Business

Answers

Advisor

Matt Johnson Chicago, IL

Chris,

1. If you move in less than year - you won't have the zero down payment buying power. You'll need your full entitlement rescored by refinancing to another loan type as John and Sam said. If you refinance to conventional, you'll want to ensure the property value has increased or your mortgage is paid down enough that you have at least 20% equity so as to avoid paying expensive PMI (Primary Mortgage Insurance), a requirement of most conventional loans.

2. No, you may reuse the benefit continuously once you have restored your entitlement. I did this recently and it takes maybe 72 hours after closing on the refinance for the entitlement restoration to reflect in the VA's systems.

3. As of 2020, there is no longer a home loan limit. See the link below:
https://www.va.gov/housing-assistance/home-loans/loan-limits/
This being said, you'll still be subject to the lender's underwriting process to ensure your ability to pay. A few of my friends are rental property owners and they've accrued several million in mortgage-related debt, but they're also pretty savvy in planning for vacancies, marketing and professional cleaning spend. They also have several mentors and real estate professionals assisting them. I would recommend you do the same so you have someone to talk you out of the red mist of the deal and prevent you from making a poor investment.

Advisor

Sam Hoffman Roslyn Heights, NY

From your post it looks like you want to use your VA loan to purchase a rental property. So if I'm right, there are a few things:
-- I think they told me at least 1 year before I could rent it out
-- You can take multiple loans but you can't go past the max entitlement in your area (DC suburb probably in the $700k range), so highly doubtful you'll be able to finance a property empire with VA loans

-- But you can buy a property with up to 4 units. Live in one for a year, and rent out all four -- but again, don't know where you're gonna find a 4 unit for $700k in DC

Advisor

John Moline Grand Prairie, TX

Hi Chris,

From my understanding on the VA loan process, the max that a person can borrow is $548k. One can have two VA loans but this is not common. Typically, a person will transfer an existing VA loan to something like a FHA loan...and then request another VA loan. VA loans are unlimited in requests for a person's lifetime.

For better insights into your area, consult with a local real estate agent.

Advisor

Yoni Auerbach New York, NY

Hi Chris,

Thank you for your service and for your question!

This article from the VA isn't all encompassing, but it should at least be helpful for your first two questions regarding wait times and limits on total amount of loans: https://www.blogs.va.gov/VAntage/31825/ten-things-veterans-dont-know-va-home-loans/

I hope this helps!

Best,
Yoni

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