One commonly asked question about VA home loans involves the purchase of a second home, seasonal home, vacation property or timeshare. Do VA home loan rules permit any or all of these types of purchases?

To help answer that question, let’s examine the VA answer in its Frequently Asked Questions page about VA mortgages.

One of those frequently asked questions addressed on the VA official site is as follows:

“Can a borrower get a VA loan for the purchase of a second home if they do not currently have a VA loan on their primary residence?”

What does the VA official site say in response? “If you are an eligible veteran and still have remaining entitlement or have had your entitlement restored, you can get a second property using a VA Loan. You must occupy or intend to occupy the property as your primary home within a reasonable period of time after closing the VA Loan.”

Note the last line of that response--the borrower must intend to live in the home being purchased with a VA loan as the primary residence. That means a summer home purchase with a VA loan is not allowed, nor is a timeshare or vacation property.

A borrower who owns one home and purchases another with a VA loan must abide by the VA occupancy rules, which are agreed to in writing by the borrower and lender at the time of purchase. Borrowers with new purchase VA mortgages may not rent out their property unless they first refinance with a VA Interest Rate Reduction Refinancing Mortgage.

Borrowers who refinance their homes with cash-out refinancing cannot rent out the property.

For more clarification on this issue, speak to a loan officer or call the VA for assistance at 1-800 827-1000. Borrowers should know that the occupancy agreement they sign as part of the VA loan contract is a legally binding document the same way the rest of the loan contract is binding.

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