How Long Do You Have To Live In a VA Loan Home Before Selling?
You can sell your home whenever you want if you have a VA mortgage. Regarding the timeline for selling the residence, the VA has no requirements. You can sell the house before the year mark if you have a good reason, like a PCS, even if your lender prefers you stay in it for at least a year.
How Long Must You Live In a VA Loan Home Before Renting?
You may rent your property to a tenant if you have resided there for at least a year or less but have been ordered to a new duty station. The tenant doesn’t need to work for the military.
Before renting out a home you bought with a VA loan, you must spend at least a year there as your primary residence. The term “occupancy requirement” refers to this. This rule has a few exceptions, including when you are deployed or moving for work.
What is the occupancy requirement?
Borrowers must spend at least a year making their new home their primary residence to meet the occupancy requirement for VA loans. This implies that the borrower must be a property resident and use it as their primary residence. The house cannot be used as a vacation or investment property, nor can they rent it out.
What are the exceptions to the occupancy requirement?
The vacancy requirement has a few exceptions. The following circumstances may allow borrowers to rent out their homes before the 12-month period:
- moving to work deployed
- a medical condition that makes them momentarily incapable of living at home
- unceremoniously left the military
What happens if I violate the occupancy requirement?
If you don’t comply with the occupancy requirement, your VA loan could be in default. If this happens, your lender may seize your house and foreclose on your loan. Any VA funding fees you received when you obtained the loan may need to be repaid.
How do I prove that I have met the occupancy requirement?
You must provide your lender with proof that you have been residing in the property as your primary residence to demonstrate that you have complied with the occupancy requirement. This documentation could contain the following:
- Utility costs
- License or other form of address verification
- mail sent to you at your residence
- voting identification card
- records from your children’s schools
What if I want to rent out my home after 12 months?
You can rent your home after residing in it for at least a year. Your obligation to promptly pay your mortgage will nevertheless remain. Additionally, it would help if you abided by all local rental laws and rules.
VA Home Loan Rules On Selling
No particular guidelines exist for selling a house with a VA loan. However, verifying with your lender before advertising your home is vital because they may have their own requirements.
There is no minimum property ownership period
There is no minimum period of property ownership with VA-guaranteed mortgages, so you can sell the house whenever you want. The terms of your mortgage should be carefully reviewed, though, as some lenders might have a minimum occupancy requirement.
You may be required to pay a funding fee
You might have to pay a funding fee when selling a house you bought with a VA loan. Borrowers who use VA loans are assessed a one-time funding fee. The loan amount and the borrower’s military service determine how much the funding fee will be.
You may be required to repay the VA funding fee
You might have to pay back the VA funding fee if you sell your house within five years of getting the loan. Since the VA funding fee is not refundable, you must pay it back if you sell your home within five years of receiving it.
You may be required to pay for closing costs
You might have to pay closing costs when selling a house you bought with a VA loan. Costs related to the sale of a home are known as closing costs. They typically consist of expenses like recording, title insurance, and appraisal fees.
You may be required to provide a copy of the VA loan closing disclosure
You should give the buyer a copy of the VA loan closing disclosure when you sell a house acquired with a VA loan. The loan terms, such as the interest rate, the monthly payment, and the closing costs, are described in the VA loan closing disclosure.
You may be required to provide a copy of the VA Certificate of Eligibility
A copy of the VA Certificate of Eligibility may need to be given to the buyer when you sell a house acquired with a VA loan. You can verify your eligibility for a VA loan with the VA Certificate of Eligibility.
How Does The VA Verify Occupancy?
The VA requires that the borrower use the property as their primary residence and move in within a reasonable time to determine occupancy. The VA states that a reasonable period is typically 60 days after a loan’s closing.
Lender Verification
Confirming that the borrower has complied with the occupancy requirement rests with the lender. Usually, the lender will examine the borrower’s tax returns, credit report, and other supporting documentation to confirm occupancy. The lender may also contact the borrower to verify that the borrower is using the property as their primary residence.
VA Audits
The VA does audits to make sure borrowers have satisfied the occupancy requirement by choosing borrowers at random. If there are any issues with the borrower’s occupancy, the VA may conduct audits.
Occupancy Requirements for VA Streamline Refinance Loans
VA streamline refinance loans have different VA occupancy requirements compared to other VA loans. The only requirement for a VA streamline refinance loan is that the borrower attest that the property was their primary residence during the initial VA mortgage.
Can My Dad Use His VA Loan To Buy Me a House?
Using a joint borrower who is not a spouse or other veteran is permitted under the cooperative VA loan program for veterans and active-duty military personnel. Most lenders won’t approve these types of loans, and they’ll also prevent veterans from purchasing a home with a sister, brother, mother, father, son, daughter, or an unrelated third party.
Can a veteran use their VA loan to buy a house for their child?
No, a veteran cannot purchase a child’s home with a VA loan. Only they or their spouse may use VA loans to buy a home.
Can a co-borrower borrow their child on a VA loan?
A veteran may co-borrow on a VA loan with their child, yes. As a result, both the veteran and their child will be liable for paying back the loan.
What are the benefits of a veteran co-borrowing on a VA loan with their child?
A veteran and their child co-borrowing on a VA loan have several advantages. These consist of the following:
- Even if the child has a poor credit history, they might be able to get a VA loan.
- The child may be granted access to more credit than they otherwise would.
- The Veteran might be competent to assist their kid in reducing interest costs.
What are the risks of a veteran co-borrowing on a VA loan with their child?
A veteran co-borrowing a VA loan with their child also carries some risks. These consist of the following:
- If the child defaults, the Veteran will be liable for paying back the loan.
- If the child doesn’t make their payments on time, it might impact the Veteran’s credit score.
- Any harm the child causes to the house could make the Veteran liable.
What should a veteran consider before co-borrowing on a VA loan with their child?
A veteran should carefully weigh the risks and rewards before co-borrowing on a VA loan with their child. Additionally, they must confirm that they are at ease paying back the loan if the child defaults.
It is crucial to speak with a mortgage lender if you are a veteran considering co-borrowing on a VA loan with your child to learn more about the procedure and determine your eligibility.
FAQ’s
How long do I have to live in a VA loan home before selling?
According to VA loan requirements, you must occupy the property as your primary residence for a minimum of 12 months before selling it.
Can I sell my VA loan home before the 12-month requirement?
In general, the VA loan program expects you to fulfill the occupancy requirement. However, there are exceptions, such as deployment, permanent change of station (PCS) orders, or hardships that may allow for an earlier sale.
What happens if I sell my VA loan home before the required period?
If you sell your VA loan home before completing the mandatory occupancy period, the VA may require you to repay a portion of the loan guarantee they provided to your lender.
Are there any penalties for selling a VA loan home early?
While there may not be direct penalties for selling early, the VA may request the repayment of the loan guarantee, which could result in additional financial obligations on your part.
Can I rent out my VA loan home instead of selling it
VA loan rules prioritize owner occupancy. However, in certain cases, such as being unable to sell or facing financial hardship, you may be allowed to rent out your VA loan home with permission from the VA.
How does the VA verify occupancy of a VA loan home?
The VA may conduct random or targeted occupancy inspections to ensure that borrowers are meeting the occupancy requirement. It is important to maintain accurate records and be prepared for potential inspections.
