L/O and working with VA loans - Posted by breeves

Posted by Carol on December 08, 1998 at 21:03:13:

What do I know? My guess is that their home was purchased with an owner occupant VA loan, however, to the best of my knowledge, one is not required to live in it forever.

I own a property purchased with an FHA owner occupant deal (HUD repo), but after living in it for a couple of years, we decided to move, and it has been leased ever since.

Hopefully someone who knows will respond, but my guess is that the good folks are ill-informed… and operating on the assumption that once and owner occupied always and owner occupied.
Suggest that someone check into it.

L/O and working with VA loans - Posted by breeves

Posted by breeves on December 08, 1998 at 20:48:49:

Just got a call on my ad. Couple needs to move and trying to sell FSBO. Only option available after getting details would be L/O but they have a VA loan that prohibits them leasing it. They will probably buy a home where they are moving. I let the call go because I did’nt have a solution. Anyone dealt with this or have a suggestion?

Re: L/O and working with VA loans - Posted by Rob FL

Posted by Rob FL on December 09, 1998 at 19:55:34:

I have a home with an FHA loan I bought in 1992. Mine specifically says I must occupy for 12 months. After that I can do whatever I want. I am sure most others would be similar otherwise it would probably be considered an unreasonable restraint.

Re: L/O and working with VA loans - Posted by Dave T

Posted by Dave T on December 09, 1998 at 18:39:14:

Unless the rules have changed recently, there is no VA prohibition against converting an owner-occupied home to an investment rental. After all, people do get transferred.

I once had a VA mortgage, and 2 months after closing the deal, the Army transferred me from Texas to Maryland. I decided to convert the property to a rental and maintained it as a rental for the next seven years until I disposed of it.

Today I have only one VA mortgage – and that is on an investment rental property.

Your sellers were probably (and correctly) told that the eligible veteran can only have one VA loan at a time. If they lease their current VA-financed house, then they can not use VA financing for their next home. The solution in this instance is to use conventional financing for their next home, leaving all their L/O opportunties available for their current house.

Re: L/O and working with VA loans - Posted by Bronchick

Posted by Bronchick on December 09, 1998 at 12:47:14:

All FNMA/FHLMC loans require tha borrower to live in the property as a principal residence, but I doubt such a provision is enforceable forever. If you lie about your intentions, then you are guilty of loan fraud. If you move out after a couple of years, I wouldn’t sweat it.