VA Loan Occupancy Requirements
The VA mortgage loan is a great way to secure funding when it comes to purchasing a home. The VA home loan program was specifically designed and created as a way to give veterans and military members better access to the housing market. Currently, IRRRL refinance and the VA loan are ranked among the best mortgage products in the American market. Similar to most government-backed loan products, VA loans are focused on financing owner-occupied homes. They are, however, not available for financing a second home, vacation home or investment property. This is why there are certain VA loan program eligibility requirements. An occupancy requirement is one of the eligibility requirements associated with VA Loans. These requirements do vary so it’s important as a borrower to understand the various provisions you are entitled to. Occupancy requirements include:
In order to secure a VA purchase loan, service members need to certify their intention to occupy the property personally as a primary residence. There is a 60-day window for VA borrowers to occupy the new house after completing the loan process. The 60-day period may not be enough for some buyers and in certain circumstances this period can be adjusted. A delay exceeding a year is normally unacceptable. These requirements do differ on VA refinance loans.
The VA expects that the borrower will move into the property within 60 days of closing the VA loan. Exceptions to this rule do exist. You can have the 60-day rule waivered if meet these conditions:
- There is a specific future event that makes it impossible for you to occupy the home on the expected date.
- You can certify that you will be moving into your property at a specific date after the closing of your VA loan.
Deployed active duty borrowers
Your occupancy status isn’t affected by deployment. If you’re deployed after purchasing a home, you are considered to be in a “temporary duty status” and able to offer a valid intent to occupy certification. The occupancy requirement is met despite whether or not your spouse will be occupying the home during your deployment.
To satisfy the occupancy requirement, the spouse should verify that they will be living in the home while you are otherwise unable to personally occupy the home. A spouse can also satisfy the occupancy requirement if a veteran can’t fulfill the occupancy requirement if they are working overseas. It can be challenging for the borrower if they are looking to purchase a home elsewhere within the country. To satisfy occupancy requirement the borrower will have to show that they are unable to live with their family due to unavoidable circumstances or they will be occupying the new house within the forseeable future.
A dependent child may live in the home while the parent or parents are on active duty or deployed away from home. Having a dependent living in the home doesn’t satisfy the occupancy requirement. As a borrower, you need to take additional action of having the dependent’s legal guardian or attorney make the occupancy certification. Most lenders don’t recognize dependent occupancy as fully satisfying VA loan occupancy requirement.
Generally, delayed occupancy is as a result of home improvements or property repairs. Your occupancy requirements are considered “delayed” if extensive changes or improvements being made to the property hinder you from occupying your home while the work is being completed. You, however, are required to declare your intentions of occupying the property immediately once the work is completed.
You need to attach copies of proof of requirement stability and your retirement application if you will be retiring within 12 months of the loan application date. Despite the stringent VA requirements on moving to a home within a specified period, as a retiring veteran, you can negotiate for an extension on the move-in date. There is an up to 12-months application delay option provided within the occupancy requirements.
Failure to meet occupancy requirements
Whatever measures that are taken in the event that a borrower is unable to occupy the property under VA loan terms are at the discretion of the Department of Veterans Affairs. The VA ensures that borrowers understand how they can perfectly fit their situations to the VA loan guidelines. If you are looking to purchase a home with a VA loan, consulting a VA loan officer to understand your benefits and rights especially when it comes to occupancy requirements is a great first step to owning your dream home.