VA Sub2 Guidance??? - Posted by James A.

Posted by John Burley on September 28, 2001 at 14:19:50:

Hi James,

You have your info. correct. There are two ways to buy a VA loan. One, take the loan subject to (this is a violation of DOS). Or two, my preferred method with a VA loan, buy the property on a Land Contract (which is not a violation of DOS.

Make sure you have control, the fine print clearly spelling it out (and in your favor), and never pay the payments to the seller. Pay either direct to the current lender or use a servicing agent. Add your entity as the additional insured. Get a POA for the property, and another specifically for the insurance.

Make sure the escrow account monies will be yours. Also include a disclosure letting the seller know that the loan will remain in their name until such time as it is paid in full.

I absolutely love this type of takeover, because you are doing nothing that is in violation of the terms and conditions of the loan documents.

Good Investing,

John Burley

VA Sub2 Guidance??? - Posted by James A.

Posted by James A. on September 27, 2001 at 23:52:11:

I just looked over a house that fits my needs for a rental property and I’m thinking of making a Subj2 offer. The current owner is ten years into a 30 year VA loan. I’ve read through all the posts I can find about dealing with VA loans and most of it looks very promising. John Burley says that it is easy to do and very investor friendly. I’m wondering what are the mechanics of these deals? How does one structure a subject 2 offer on a VA loan? Is there a rapid source of detailed information available?

I am told that VA doesn’t consider a land contract to be transfer of ownership and therefore doesn’t trigger a DOS. True/False?