Can you buy a vacation home with a VA loan? If you have this question in mind then you are at the right place! Check our guide on VA loan for vacation home.
The VA loans come with a broad range of benefits, starting from low interest and no down payment. These advantages are attractive for qualified borrowers, so they might wish to use the most of their benefits. However, VA loans come with specific limitations when it comes to buying a second home. Can I buy a vacation home with a VA loan? No, you can’t buy a vacation house with a VA loan. The VA clearly states that you can’t purchase vacation homes and investments with a loan.
Can a VA loan be used for a vacation home?
Before you ask, “can you buy a vacation home with a VA loan” there are a few things you should know to understand it better. VA loans come with strict requirements to get approved. One of them is to make the home your primary residence. The VA allows you to buy a second home, but only if you move. However, they don’t allow you to buy a vacation home or investment property.
VA requires you to move in within 60 days after closing the loan, a requirement that you can’t meet if you rent your property or go for a temporary stay. However, buying a second home isn’t impossible with a VA loan. When you already know that the answer to “can I buy a vacation home with a VA loan” is no, how is this possible? In addition, we provide you with the answer to this intriguing question.
Definition for vacation home
Can a VA loan be used for a vacation home? To understand the background, you need to know the definition. A vacation home or second home is a property you can rent, but this isn’t its primary purpose. The IRS defines a vacation home as a property where you should stay for 10% of the days you rent it. You can make money from it, but this shouldn’t be the primary purpose of owning this home. Knowing this, you can’t buy a second home with a VA loan.
On the other hand, an investment property is a home that you use solely for making money. Since you won’t live there, you can’t purchase this house with a VA loan. The only property that can be bought with these loans is a primary residence, a home where you stay most of the time.
Can you buy a second home?
However, you can still purchase an additional property with a VA loan. You can’t use a loan for a vacation home, but you can use it for a new primary residence. If you move out to a new location, you might qualify for buying a new home with a VA loan.
If you have paid the loan, have the required credit score, and the required income, you can qualify for a new home loan at your second location. However, you need to fulfill a few basic requirements if you wish to do so. Firstly, you need to own the title. This means that you need to have fully paid the loan, and the home is in your possession. Or, you need to have a minimum entitlement required by the lender to get a second loan.