Occupancy Rules for Homes Purchased with a VA Loan

Marcus Marion, CMA™ 1 month ago 0 17

The Department of Veterans Affairs has specific rules for occupancy when a VA loan is used to buy a house. Many of these requirements can be found in VA pamphlet 26-7, the official lender’s handbook issued by the Department of Veterans Affairs.

But that “pamphlet” is hundreds of pages long, and you probably have more important things to do than sift through it. So we’ve done it for you. This article explains the occupancy requirements and rules for homeowners using VA loans. 

(Note: The following information applies to home buying scenarios in particular, where the borrower uses a VA loan to purchase a house. Refinancing scenarios have their own set of rules.)

General Occupancy Requirements for VA Loans

Here is the Department of Veterans Affairs’ general rule regarding occupancy, from Chapter 3 of the lender’s handbook mentioned above:

“The veteran must certify that he or she intends to personally occupy the property as his or her home.”

The VA often refers to “veterans” in their loan guide and other materials. But you do not have to be a veteran to qualify for this program. Military members who are currently serving can also qualify, if they meet certain length-of-service requirements.

Congress created the U.S. Department of Veterans Affairs and also handed down some of the rules and requirements that are still in place today. One of those rules established the basic occupancy and residency requirements for VA-guaranteed mortgage loans.

The official handbook states that the VA can guarantee mortgage loans for eligible borrowers when those loans are intended to “purchase or construct a residence, including a condominium unit to be owned and occupied by the veteran as a home…”

Which leads to the next logical question:

How long do you have to move into the home, when using a VA loan?

Occupancy Within a “Reasonable Time”

Generally speaking, home buyers who use VA loans have up to 60 days from closing to occupy the home as their primary residence. But the Department of Veterans Affairs allows for several exceptions, which could stretch the timeline out to a year.

The official guidelines often use the phrase “reasonable time” when describing the rules for occupancy when a VA loan is used. In this context, the reasonable timeframe is 60 days after the loan closing.

But there are certain scenarios where a person cannot move into the home right away. For instance, the house might need repair work before the buyer can move in. And by its very nature, military service can also disrupt or delay the moving process.

The Department of Veterans Affairs allows exceptions for these and other scenarios, extending the “reasonable time” far beyond 60 days.

Generally speaking, a longer timeframe may be acceptable if both of the following conditions apply:

  • the borrower certifies that he or she will personally occupy the property as his or her home at a specific date after loan closing, and…
  • there is a particular future event that will make it possible for the veteran to personally occupy the property on a specific future date.

If both of these conditions are met, occupancy of a VA-loan-purchased home can be put off for up to one year. 

Considerations for Spouses and Children

The Department of Veterans Affairs also allows exceptions relating to spouses and children who occupy the home while the military member is unable to do so.

If a person buys a home with a VA loan, but cannot immediately move in due to military service, a spouse or dependent child can satisfy the general occupancy requirement. Regarding children, the handbook states that “the veteran’s attorney-in-fact or legal guardian of the dependent child must make the certification and sign VA Form 26-1820.”

Move-In Delays Due to Repairs or Renovations

Repairs and renovations can also prevent a home buyer from moving into the house within a “reasonable time.” And the VA allows exceptions for these cases as well.

Home buyers who cannot move in right away because of repairs or renovations could also get an exception to the 60-day “reasonable time” occupancy requirement.

But here again, the military member or veteran must certify that they fully intend to occupy the home as a primary residence once the work has been completed. This program is not designed to finance vacation homes or investment properties.

Key Takeaways From This Article

We’ve covered a lot of important information in this guide. And like many VA loan-related topics, it can be a bit confusing. So let’s wrap up by summarizing the most important points.

  • Primary Residence: VA loans are specifically designed for veterans and active-duty personnel to buy and occupy a primary residence, not for investment properties or vacation homes.
  • 60-Day Rule: Generally, you have 60 days after the VA loan closes to move into the home.
  • Exceptions: If you have a valid reason (such as military deployment or property repairs), the VA allows for extended occupancy timelines up to 12 months, on a case-by-case basis.
  • 12 Months: Most VA lenders require you to indicate your intent to live in the home as your primary residence for at least 12 months, although there may be flexibility for valid reasons.
  • Spouse Occupancy: Deployment or work commitments may make it impossible for you to move in immediately. In such cases, your spouse can fulfill the occupancy requirement.
  • Active-Duty Exceptions: Active-duty service members have more flexibility for fulfilling occupancy requirements, especially when deployed away from home.

As you can see, most of the occupancy and move-in requirements for VA loans are fairly reasonable. For most home buyers, 60 days is more than enough time to move into a home after closing. And there are exceptions for those with extenuating circumstances.

M

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