You have three options:1. In cases where a veteran home-owner gets a divorce, the VA will allow for an "unrestricted transfer". This is only allowed when the military spouse and non-military partner are co-borrowers. The VA will strongly urge both parties to sign a release of liability so the departing co-borrower may not be held liable for credit issues that may arise as a result of default or foreclosure.2. Can you rent it? The answer is possibly. You cannot use a VA loan to purchase a rental home. VA loans may only be used to purchase a primary residence and not a second or third house to be used as an investment property. But, once you've lived in the home, if you don't want to sell it there are no restrictions on renting it out. The VA gets a little sticky, though, when you live in the home a very short time and then try to rent it out. With some mortgage companies, you may have to submit a letter requesting permission to rent out a VA loan house.3. Only other way is to refinance! Almost all FHA loans are assumable; however, almost all conventional mortgage loans made after 1980 are not assumable. Do your due-dilligence and ask your Loan Officer up-front before getting a quote.Let me know if you need any help! We have seen a lot of VA loans through, and do our best to help fellow vets through transitions.Feb 23rd 2013
Good Morning. The question should be posed directly to your loan servicer for the "final answer" on your question. For information provided by the VA on this question, please see the following website: http://www.va.gov/opa/publications/benefits_book/benefits_chap05.aspLoan Assumption Requirements and Liability: VA loans made on or after March 1, 1988, are not assumable without the prior approval of VA or its authorized agent (usually the lender collecting the monthly payments). To approve the assumption, the lender must ensure that the borrower is a satisfactory credit risk and will assume all of the Veteran's liabilities on the loan. If approved, the borrower will have to pay a funding fee that the lender sends to VA, and the Veteran will be released from liability to the federal government.A release of liability does not mean that a Veteran's guaranty entitlement is restored. That occurs only if the borrower is an eligible Veteran who agrees to substitute his or her entitlement for that of the seller. If a Veteran allows assumption of a loan without prior approval, then the lender may demand immediate and full payment of the loan, and the Veteran may be liable if the loan is foreclosed and VA has to pay a claim under the loan guaranty. Loans made prior to March 1, 1988, are generally freely assumable, but Veterans should still request VA's approval in order to be released of liability. Veterans whose loans were closed after Dec. 31, 1989, usually have no liability to the government following a foreclosure, except in cases involving fraud, misrepresentation, or bad faith, such as allowing an unapproved assumption. However, for the entitlement to be restored, any loss suffered by VA must be paid in full.Feb 23rd 2013
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