Restrictions for purchasing a multi-unit property with a VA loan
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- čas přidán 8. 09. 2024
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One of the most amazing benefits of a VA loan is that you can use one to purchase a multi-unit property. However, there are some restrictions you'll have to follow in order to get one.
For starters, you cannot purchase a multi-unit property with a VA loan if the building has more than 4 units. While duplexes, triplexes, and four-plexes are all fine, anything above that is not approved for purchase with a VA loan.
In addition, you can't rent out all of the units in the building. What we mean by that is that YOU must live in one of the units as your primary residence. Living on the property is necessary as part of the VA loan program's occupancy requirement.
Now, these aren't the only restrictions you'll encounter when it comes to purchasing a multi-unit property with a VA loan. There might also be some additional financial requirements you'll need to meet, along with some extra minimum property requirements (MPRs) for the home.
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This video is not intended for residents or homeowners in the states of WA, NY, or MA.
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Great info, you helped me educate my Loan officer on the loop hole around the 6mo PITI.. my W-2 income covers the 2 unit I plan to buy & hope everything goes smooth & can close in the next 2 months!! 🙌🏽 THANK YOU!!!
Best of luck! and USE US next time! :)
Great content BROTHER
Great video. Thanks
Glad you liked it!
Is there a video on how to add other veteran's and increase and or join the loan to create a 8 plex?
Unfortunately, the Department of Veterans Affairs permits financing on properties with up to four units. A Veteran must occupy one unit as his or her primary residence.
Have u seen a scenario where one cannot move from a single family to multi family because it’s not “seen” as a primary residence? I used two VA loans before on single families. I still have them. I’m about to move and I see a multi fam that we love. I’m being told I can’t because they’ll see it as an investment property… I do intend to stay there as my primary residence for the next few years.
no this is not true and I have never seen this. They may ask for proof and dig a bit if the multi unit is located in the same town, etc. How far is it from your current home?
@@lowvarates it’s about 20 miles. We currently live in GlenBurnie, Md … the multi family we want to move to is Downtown Baltimore a much better location with a lot more things to do. I did plan to retain the current Ouse tho and rent it out to Live in the multi family.
@@tyrellgoeslive That should not be an issue. Again, there may be questions, but you will write an letter of explanation (LOE) as to why the move etc and you should be good. Have you applied with us?
This is awesome thank you! I'm looking at a home that has a2br apt attached and move my neice and her girls into it. Any restrictions with a rural property with a barn or part of the land that had an easement due to some acreage being rented to a neighboring farm? Could that be included as future income? I'm not looking into having a commercial farm, just for the family.
This will for sure be a much harder deal to get approved due to the variables. You can use the income from the farm for approval but not if it is "future" income. It must have history of producing income. The easement seems like it would be your biggest issue. I personally think you will struggle to get VA financing on a property as you describe.
How long do we need stay and wait before converting the VA to another loan type to space up the VA loan for another property?
There is not time line, you can do it as fast as you can get qualified for a NON VA Loan.
Anybody know how long you have to occupy, before you can rent it out ?
There is no written rule.
Can we use the VA to build a multi-plex?
yes, Low VA Rates does not do VA construction loans, but you may find someone.
He literally said you can. Did you listen?
@@JohnJohn-co9yz all due respect Sir, no need for your sarcastic comment. Keep it profesional and like a gentleman.
Can I buy land and build a duplex with the same loan? Also, where can I find more information on the these limitations? Ideally I would prefer to build a 3 or 4plex.
With a VA loan you can build a duplex but not a tri or fourplex. We’d like you to know that VA construction loans are hard to find and seemingly very difficult to complete. We cannot help with VA construction
@@lowvarates I'm getting conflicting guidance. I asked another company and they said you can build up to a 4plex.
I wonder why the VA will let you buy a 4plex and build a duplex.. but not approve a 4 plex build? And sound like I would have to get a construction loan elsewhere and use VA for the purchase.
@@brianhudson9004 I’ll research a bit more but I’ve always understood you cannot construct a fourplex. Yes I agree with your findings that finding the construction loan will be the hard part
This makes sense now lol I was wondering why more people didn't use VA loans on multiplexes. That cash reserves restriction eliminates the benefit of no money down.
Well we are glad it was helpful. If you have more questions, let us know. There would be no need for reserves if you are able to qualify without rental income in your DTI
@@lowvarates Thanks for the reply! Godspeed to the average person trying to qualify for a multiplex without rental income. It may be great for married couples though!
It doesn’t eliminate the benefit of no money down. The benefit is still there and you still keep the money. Reserves is just that, reserves.
@@more_life You can't keep money you don't have in the first place. There is no benefit if you don't have the money.
@@mikeruck2888 if you don’t have money then you don’t need to be a homeowner. Houses need maintenance and unforeseen circumstances happen.
I have used my VA loan to buy a duplex which I've been in for 4 years (house hacking). I would like to just rent out my current duplex and transition into a 4-plex and live in one of the units. What are some ways a veteran can buy the 4-plex while still keeping the original duplex purchase. The problem I'm seeing is that nearly all of the VA loan entitlement money is tied up in the first purchase of the duplex. I would really appreciate thoughts on possibilities here.
Great question. In this market, I’d suggest a refinance into a conventional loan. While you still occupy the home, do an owner occupied refi and payoff the VA loan. If you do not qualify for a conventional loan there are new renter non conforming loans you may get. This would free up all your entitlement and be a good option.
If someone is individually unemployable or 70% service connected with 100% pay, Would this be considered financially gainful income. In other words would it affect the pension received by the veteran? Thanks
I wish I had an accurate answer, but we are not pension specialists. I can tell you that the disability income is great for getting a loan and considered stable and applicable.
What if I've been living in a multi-unit home and functioning as an informal property manager/"head tenant" where I handle collecting rent and utility payments from the tenants and I can get the landlord to vouch to that effect?
That should work.
Can you speak on buying multiple multifamily properties with your va loan, we close on a triplex 315k next month and want to buy a duplex a year later we've found one and its 215k, our va loan entitlement for our county is 548k we gross 90k and have no debt other than our new triplex that we're going to live in one of the units.
Yes, and in the meantime, here is what I would say. You of course have to live in the one you close on next month. If you end up with sufficient entitlement to then buy another one, while still keeping the VA loan active on the 315K one, then you will need to move into it and if you do that too soon after buying the first one, the underwriters will likely have a serious concern. That said, there are better options at times too. If the market keeps going up, which most of us thing it will, you may be able to pull cash out of the first one in 6-8 months, then use that to down payment on the new one and go with a NON VA Loan too. Who is doing your loan on the one for 315K? Did you happen to give us a shot? We always want to compete for your business.
Lets say I have an investment property owned by me and some other family members that thru a partnership to fix up properties, flip them or rent them out.
Well this one property I may wish to purchase for my own dwelling instead. Can I purchase a property from the partnership with a VA home loan?
you sure can.
if I buy a two family house, but it is the houses are leased however I'm planning to live in the basement, would that qualify me or disqualify me?
if you will occupy one of the units of what I believe you are referring to as a duplex, then YES you are good.
Can I use VA to build a 4plex on land I own?
to build no, you can only build a duplex, but you can use it to buy an existing four plex.
Can I put a ADU on my land that already has a duplex through a VA loan?
They will not allow that with a VA loan no.
I have been hearing that you need experience working as a property manager or real estate experience do get a multi family property? Is this correct?
That is not correct. What you are referring to is that in order to use anticipated rents if you need rental income to qualify for the loan, then you either need to have prior property management experience or hire a property manager. Does that help?
@@lowvarates yes this helps!
@@michaelsines9203 glad to hear that. We would love to help you when you are ready
Do you gotta occupt the property for the entire length of the mortgage term?
absolutely not
@@lowvarates Exactly how long do you have to live there before moving and renting all units?
@@akeashepard343 there is no time frame. What is important though is that you are not caught working the system and saying the home will be your primary residence when in fact that was never the intention. We trust our Vets as does the VA. Does that make sense or do you want me to try and be more direct?
Would this include a property with 2 separate homes?
If taxed as one property yes. If this is two separate tax parcel numbers then no.
@@lowvarates
Does this go for any combination? For instance 4 single family homes sold as one, maybe two duplexes side by side, or a single family home that has an ADU and two mobile homes on the same property? What’s my rule of thumb? How do I know what’s feasible and what’s not?
@@robertrayford8708 It will come down to the appraisal and legal description. If it is a legal multiplex and not over 4 total units you can do it.
Lol i thought it was funny you thought you were talking too fast cause im over here listening on x2 speed XD
That is great, I must have been flying for you.
@@lowvarates indeed, but still was wonderful and consice information! I appreciate your videos and enjoying watching them 😁
@@kawaiisenshi2401 Thank you!
Time is money!
Your transitioning timing is horrible. Couldn't make sense of what you said.
I will try to transition more smoothly next time. If there is something in particular you are trying to research or learn, please ask here and I will get you the info you are after.