Can I Use A VA Loan For A Second Home, Rental, Vacation Condo, or A Manufactured Home?

Can I Use A VA Loan For A Second Home, Rental, Vacation Condo, or A Manufactured Home?

Vets, military spouses, and their survivors may purchase a home using a VA loan. As part of their home loan guarantee program, one of the essential parts of the VA’s mission is to assist you in buying, building, repairing, retaining, or adapting a home for your occupancy.

It is important to note that VA Home Loans are provided by private lenders, such as banks and mortgage companies. However, because the VA guarantees a portion of the loan, they can offer more favorable terms for the loan. Generally, this means lower interest rates.

For those veterans who qualify for the VA’s home loan program, its main objective is to provide them with affordable home financing terms that are often more favorable than those offered by traditional lenders. The term “veteran” is typically used by the Department of Veterans Affairs as a descriptor for certain members of the Selected Reserve and active-duty personnel, as well as specific categories of their spouses.

In this article, we’ll provide an overview on how to apply for a VA home loan for your second home, rental, vacation condo, or manufactured home.

A Veteran’s Guaranteed Loan In Six Steps

  1. Select a property that meets your needs.
  2. Contact a lender to obtain a mortgage.
  3. Present your discharge or separation papers for the most recent service period and/or your Certificate of Eligibility.
  4. An approved appraiser appraises the property.
  5. An estimate of the property’s fair market value is developed.
  6. If your application is approved, you receive the loan.

Can VA Loans Be Used for Non-Primary Residences?

Second homes serve as getaways from the everyday hustle and bustle, both in the lending industry and in everyday life. Loans from the VA are intended to help people buy or refinance their primary residence, so you cannot use the loan to purchase a home that you do not intend to live in most of the time. The primary residence must be occupied within 60 days of the date of purchase, with a few possible exceptions.

It is easiest to discuss what will happen if the property that was first secured by the VA loan has been paid off, and you wish to keep it. If you qualify, you may be able to receive a one-time restoration of your full VA entitlement if you qualify.


No matter if your VA-backed home is not paid off, and you intend to keep it permanently, or if you intend to sell it, you can turn an original VA-backed home into a second home. To be able to afford a home, you have to qualify.

In the case where there are any remaining entitlement dollars, you may not be able to obtain a VA loan if you intend to keep the property permanently.

The fact that a VA loan is an assumable mortgage should not frighten you if you decide to sell the property. In essence, the person who purchases your house will assume the terms of your mortgage and will take over the payments without the need to repay your loan.

Under assumption, when you sell a property to someone who is not eligible for VA benefits, you will be liable for losing your VA entitlement. It is also possible for the property to be sold to someone with a VA approval who assumes responsibility for the property. During this time, the VA will assume ownership of the property. With the full VA benefits, you will be able to buy a home with the full VA benefits if you qualify.

Check out our article on the different VA loan types!

Can I Use a VA Home Loan to Finance a Condo?

All veterans who have served in the Armed Forces, National Guard, or Reserves are eligible for the Veterans Administration Home Loan Program, including condominium financing.

A significant number of individuals consider the possibility of purchasing a traditional home as there are several advantages to owning a condominium. Depending on one’s current circumstance, one may be able to take advantage of the VA Home Loan that they have been awarded to purchase the condominium of their choice.

Many condos are eligible for the VA’s home loan programs, but not all. Given this information, you need to be aware of these programs.

If you are interested in using the VA Home Loan as a means of purchasing a townhouse or condo, here are the requirements:

  1. Owners must occupy at least 50% of the units.
  2. There are fewer than 15% of unit owners who are behind on their HOA dues.
  3. For newly constructed condo projects or those converted from apartments, at least 75% of the units must be sold.
  4. There must be more than one unit in the project.
  5. The total number of units owned by a single entity (individual, investor, or company) cannot exceed 10%.

Can I Buy a Second Home With a VA Loan?

Answering that question depends entirely on how you define a second home. The borrower must agree to live in the home they are buying with a VA loan, as well as meet the basic requirements of the program and qualify on the basis of income and credit. In order to understand what is meant by the expression “second home,” it is important to define the term.

Kinds of Properties

There are two kinds of properties: vacation properties and investment properties.

According to the IRS, properties are categorized into three groups:

  • The Primary Residence: A VA loan can only be used for your primary residence, which is the only residence that is eligible for a VA loan.
  • Second Residence: A second residence is defined by the Internal Revenue Service as a place where you spend a significant amount of time. In addition to the term second home, vacation homes can be used as a second residence. The main purpose of this site is not to make money, although it is possible to raise funds with this site. During the time that the property is rented out, it is actually a requirement for you to live in the property for at least 14 days. You will be required to live in the apartment for at least 20 days out of 200 per year, for example if you rent it out for 200 days per year. In order to qualify for VA loans, you must be able to purchase a primary home and a second home.
  •  An Investment Property: The first thing you need to understand about investment properties is that they are properties that you own with the intention of renting out to generate revenue in the future. The VA loan cannot be used to purchase investment properties and investors cannot obtain a VA loan to purchase investment properties.

New Primary Residence

Is it possible to use a VA loan to purchase a second home? There is a number of frequently asked questions regarding the purchase of a vacation home or investment property.

Is it possible for you to move without selling your current home if you are a homeowner planning to move? Is it possible for you to obtain a VA loan in order to purchase a new primary residence for your family in your new location?

In some cases, yes. It seems that there are several scenarios in which you may be able to use a VA loan to buy another home, as noted by U.S. News & World Report:

  • Your first mortgage has now been paid off. The full repayment of your first home loan will be available to you once you have paid off your first house. It is likely that you will be able to obtain a VA loan for a new home in your new location if you are eligible for a VA loan and have the required income and credit.
  • As a veteran, you took out a VA loan to purchase your first home, and you are still paying it back. When you purchased your first home using a VA loan and the balance is still being paid, the amount of the new home that you will be able to purchase will depend on the amount remaining on your entitlement. There is a possibility that you may be eligible for a second VA loan if your eligibility is sufficient and your credit and income satisfy the lender when you move to a new primary residence.
  •  It is likely that your first home was purchased using a non-VA loan. In order to get a VA loan, you do not have to be a first-time home buyer, so using a non-VA loan in the past should not be a problem. In theory, if you meet the VA and lender requirements, you should be able to use a VA loan to buy a home in your new community.

Can I Get a VA Loan for a Multi-Family Home?

Recently, multi-family homes have become increasingly popular in the housing market. A multi-family property consists of several apartments built in one building with multiple units. There is a portion that the owner owns on the property, and the remaining units are leased to other tenants.

A significant advantage of using this type of structure is that it provides the owner with an additional income source or helps cover most of their mortgage payment.

There is no way to obtain a VA loan for any type of rental property other than a multi-family residence. To qualify for a loan, borrowers must be living in one of these units within one of these buildings. Otherwise, the borrower will not be able to get a loan from a bank.

Points To Be Considered When Making Va Loans For Multi-Family Homes:

  1. A minimum of one owner must move into at least one of the units within 60 days of closing the transaction.
  2. If two veterans decided to purchase the property together and use their eligibility to purchase it, they could purchase up to a 7-unit building.

Consideration of Rental Income:

If rents from occupied apartments are used as a measure of eligibility, they can be considered an indicator of eligibility for VA loans. It is, however, essential to demonstrate the following:

  1. The borrower has extensive experience as a landlord or prior experience managing a multi-family property.
  2. In addition to your expected income, you can also include the amount of rent you expect to collect. Your estimated rental income is calculated based on either your verified previous rent from an existing property or the fair monthly rental estimate provided by an appraiser.

It is important to note that 75% of the verified rent amount can be considered rental income if it is already rented out. This accounts for 25% of vacancies.

An appraiser should prepare a letter to VA that includes a description of the property’s “Fair Rental Value” when a loan application is made for a property that has not yet been occupied.

Is your loan within the VA loan limits? Find out!

Can I Get a VA Home Loan for a Manufactured Home?

Yes, it is possible to get a VA loan for a manufactured home. In addition to manufactured homes, mobile homes may also be considered manufactured homes if specific requirements are met.

The VA offers manufactured home loans that the VA guarantees, which means that in the event of a loss or if the borrower cannot make payments on the loan, the VA will guarantee the loan to the lender.

Eligibility Criteria for Manufactured Home Loans:

  1. Located on a permanent foundation
  2. Taxed and classified as real property
  3. Comply with minimum VA property requirements (MPRs)
  4. Real estate must comply with applicable building codes and zoning requirements.

What Does It Mean When a Manufactured Home Is Affixed to the Real Property?

Manufactured homes must meet specific requirements to qualify for the status of real property. Because different states and local jurisdictions have other procedures for classifying manufactured homes as real property, local governments have developed legislation outlining their strategies to organize manufactured homes.

A deed of conveyance often has very similar documents to a title certificate (e.g., a certificate of title). You may need to submit an affidavit of attachment in some states for your manufactured home to be classified as real property.

Manufactured homes built before June 15, 1976, are generally not eligible because they do not comply with the U.S. Department of Housing and Urban Development (HUD) code requirements. However, it is also possible that some of these homes may qualify for after being retrofitted.

Can I Buy a Rental Property With a VA Home Loan?

VA loans are not meant to be used for the purchase of investment properties or rental properties.

How Long Must I Live In the House With a VA Loan?

A term of occupancy clause is not typically included in VA-guaranteed mortgages, so borrowers are not required to remain in their homes for a certain length of time. You do not have to worry about a prepayment penalty if you intend to sell your property in the near future.

The vast majority of people, including VA homeowners, would be wise to hold off on selling their home until they have developed enough equity in their homes to break even or produce a profit. It is likely that you will be able to pay off your mortgage, real estate commissions, and closing costs with the proceeds from the sale. You may be subject to capital gains tax if you sell your home within two years, regardless if it is VA-backed or not, and make a profit.

Can I Get a VA Home Loan for a Vacation Property?

The VA loan can only be used for the purchase of a permanent residence. Consequently, vacation homes cannot be purchased with a VA loan.

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