Posted by Steve W (WA) on August 17, 2002 at 10:15:40:
Of course, I am writing this on the fly, and cannot remember the limit, but I did call the VA and what Tim says is confirmed. I am thinking it was about 240K or so - check the archives first, and then call the VA.
Can you do a sub2 or CFD on a VA loan? - Posted by Craig (CO)
Posted by Craig (CO) on August 16, 2002 at 21:43:20:
Hello all,
I have a seller who currently has a VA loan and is looking to sell ASAP as he needs to upgrade to a larger home to accomodate his growing family. Anyway, we have discussed doing a sandwich lease option, but his name will still be on the deed and it seems that this will present a conflict when he applies for another VA loan to buy the new house. I have a couple of questions about this scenario.
If he deeds the property to me, his name will no longer be on the deed. In this case, will he be able to apply for a new VA loan?
Are there any inherent risks with taking the deed on a VA loan that I should be aware of?
Thanks in advance!
Re: Can you do a sub2 or CFD on a VA loan? - Posted by Tim Fierro (Tacoma, WA)
Posted by Tim Fierro (Tacoma, WA) on August 16, 2002 at 23:43:34:
Craig, Although Terry and Stacy have said for #1 that the seller won’t be able to apply for a new VA loan, I thought there was a conversation recently about this.
The discussion was about this topic, but I commented that I thought it went with some form of limit. That you can apply for a VA loan for up to a certain amount. You then have this limit available to you. So now if you only used a partial VA benefit, there was still a partial left. What those limits are or how it works, I don’t know and a call to someone in VA benefits might be helpful. So while the seller may have a loan up to some amount, there may still be some VA benefit still left to them. This discussion took place with others taking the position like Terry and Stacy are proposing, but my memory seems to recall that there was another person who explained as I have ‘tried’ to above. That is why the call to VA benefits would be the best answer to the question.
Remember though as Stacy says, there are many loan products out now that can suit most everyone.
Re: Can you do a sub2 or CFD on a VA loan? - Posted by Stacy (AZ)
Posted by Stacy (AZ) on August 16, 2002 at 23:21:59:
No, his name will still be on the loan, even though he deeded the property to you, and no longer owns it. Therefore, he will not be able to use the VA for another loan until this one is paid-off.
It’s no more risky as any other kind of loan. But did you know you are able to buy via CFD without violating the Due on Sale clause? That’s a nice feature of a VA loan, not having to worry about the loan being called due.
What I tell people in situations like this is that there are many loan products other than a new VA loan now days. There’s really not much need for them to use a VA loan to buy another house. You might even speak to your favorite mortgage broker to find a product that mimics a VA loan for them.
BTW, if he’s truly motivated, he shouldn’t be this picky. Is he truly motivated?
Good luck.
Re: Can you do a sub2 or CFD on a VA loan? - Posted by Terry (Houston)
Posted by Terry (Houston) on August 16, 2002 at 23:14:03:
If you take over the loan subject to or by CFD the loan will still be in his name and he will not get to use the VA.
The only way the VA frees up is when the loan is paid off, not by transfer of deed. Sorry.
Terry
Re: Can you do a sub2 or CFD on a VA loan? - Posted by Terry (Houston)
Posted by Terry (Houston) on August 16, 2002 at 23:13:52:
If you take over the loan subject to or by CFD the loan will still be in his name and he will not get to use the VA.
The only way the VA frees up is when the loan is paid off, not by trnsfer of deed. Sorry.
Terry
Generally, you can only get one VA loan at a time. - Posted by Dave T
Posted by Dave T on August 17, 2002 at 10:53:16:
VA loan limit and VA entitlement are two completely different things. The veteran uses his entire VA entitlement when purchasing his primary residence with 100% VA financing. The VA loan limit establishes the maximum amount the veteran can pay for the house and still use VA financing.
Even if the purchase price is less than the VA loan limit, the veteran’s entire entitlement is used. The veteran can only get another VA loan if his entitlement is reinstated. To get his entitlement reinstated, he must either pay off the former loan or have another veteran substitute their entitlement and assume the former loan.