Learn about the approved uses for VA Home Loans.
A less talked about requirement with VA loans is the VA loan occupancy requirements. The VA's occupancy requirements essentially state that if you purchase a home with a VA loan, you need to live there.
But what does that mean? How long do you need to live in the home? And do those rules pertain to refinancing?
VA loans are for primary residences only. No vacation homes, rental properties, farms, or any other sort of non-primary residence.
The primary residence requirement states the borrower must personally occupy the home. Meaning, they must live in the home or intend to live in the home within a reasonable timeframe following closing. A reasonable timeframe is defined as 60 days from closing.
However, if a specific date of occupancy after closing is specified and future events make this date unattainable, the reasonable time may be extended. Typically, anything beyond 12 months will not be considered reasonable.
There are specific intermittent occupancy provisions for those who may need to travel often or for extended periods of time for business.
Intermittent occupancy is acceptable only if the borrower has a history of continuous residence in the community, and there is no indication that the Veteran has established or will establish primary residence elsewhere.
There are also certain cases where a borrower's spouse can satisfy the occupancy requirements.
If you are an active duty borrower, your spouse can satisfy the occupancy requirement if you cannot occupy the property within a reasonable timeframe due to active duty.
If you are a Veteran, whether or not your spouse can satisfy the occupancy requirement varies from case to case. Your spouse may be able to meet the requirement if you cannot move within a reasonable time because of non-Military employment commitments elsewhere.
It is important to note that your spouse is the only family member who can satisfy this occupancy requirement.
If you are deployed and don't have a spouse, the VA considers you to have temporary duty status and allows you to fulfill occupancy requirements due to your intent to occupy.
Refinancing is slightly different. While the VA cash-out refinance carries the same occupancy requirements as a VA purchase loan, the VA streamline (IRRRL) is somewhat different.
With a VA streamline, the borrower only needs to certify they previously occupied the property.
If you have questions about occupancy and want to know if you meet the VA's standards, let VAMortgageCenter connect you with a home loan specialist.