Forgotten Your Password?

Need to Register?

Question Icon

Is it against any rule to have 2 VA mortgages?

My husband and I would like to buy our first house, live in it, but then ultimately rent it out and purchase another house, then hopefully do the same thing. Plans were halted once we were told we cannot use a VA mortgage for investment, but what if we keep it owner occupied initially? Would we be barred from getting that second mortgage either way? by elenreseda6236841 from Hingham, Massachusetts. Nov 14th 2014 Reply


Jason Vondrak (jvondrak)
#184 ranked lender in California - 1,725 contributions

You can only use your VA eligibility on one property at a time. You could potentially use a VA loan to purchase the first property and then refinance to a conventional loan when you are ready to rent it out. You can then use your VA eligibility to purchase a new home to live in.

Nov 14th 2014
2
1
William J Acres (William_Acres)
#1 ranked lender in Arizona - 8,045 contributions

Technically, you can have multiple VA mortgages at one time, however entitlement is limited to a total of $417K. This is referred to "2nd Tier Entitlement".. If you have an existing VA loan with an outstanding balance of $300K, then your next home with zero down cannot exceed $117K (300,000 + 117,000= 417,000). If the 2nd home purchase price is greater than $117K, then you will need to put 25% down payment of every dollar above this amount. Example: Your 2nd Tier Entitlement home is $217K which is $100K over your maximum entitlement. In this scenario, you would need $25K down payment. It's true that you cannot use VA for investment purchases, but that's not your intent.. your intent is to purchase it.. live in it for a few years, then rent it out.. then purchase another home to live in. this is allowable.. If you don't want to put that much down, then there are ways around it.. If your initial home has more than 20% equity at the time you decide to rent it out, then you can refinance it into a conventional mortgage which payoff your VA loan and free up all your entitlement. Then you use VA to purchase the next home. There are other options, but this would be the best.. When you go about shopping for your new home, it's best you talk to an experienced mortgage broker, not the big bank on the corner.. The broker is trained to analyze your specific scenario and goals, and put you in a position to obtain them in the future.. most so called "Loan Officers" at the local bank are merely application takers.. they don't have the proper training to see the big picture.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. William J. Acres, Lender411's number ONE lender in Arizona. 480-287-5714 WilliamAcres.com

Nov 14th 2014
2
1
Todd Tholl (toddtholl@leader1.com)
#4 ranked lender in Iowa - 238 contributions

Good advice from William below

Nov 14th 2014
1
1
Sean Young (SeanYoung)
#2 ranked lender in Colorado - 1,109 contributions

It will depend on if you have any entitlement left over to use. If so, then you can get a loan to 100% of the remaining entitlement and then pay 25% of the difference between the purchase price and the max entitlement. You would need to intend and occupy the property for at least a year on the first one. Looking below, William gave a good detailed answer. Best wishes, Sean

Nov 18th 2014
0
0
Phil Dumouchel (PhilDu)
#1 ranked lender in South Carolina - 2,228 contributions

William gave you the expanded explanation. Bottom line is that you can do what you propose as long as you occupy the home for a reasonable period of time (like a year) before buying another. The key will be whether you have sufficient remaining entitlement for the 2nd loan or will need to provide at least a partial downpayment.

Nov 14th 2014
0
1
Subscribe to our news feed.