VA Loan Occupancy Requirements: How Soon Can I Sell?

Thomas Short
Military VA Loan contributor

The VA loan and IRRRL refinance are among the best mortgage products on the market. However, there are certain eligibility requirements to get either VA product.

One requirement of the VA loan that doesn’t get much attention is occupancy. A VA loan or refinance is supposed to help veterans and active military members afford a home to live in – not to be used for other purposes.

As a result, VA loan occupancy requirements were created to make sure that home buyers are not only VA eligible, but planning on living in the home they purchase or refinance.

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The VA’s occupancy rules

The occupancy requirements are fairly straightforward. As stated by the VA, “the law requires a veteran obtaining a VA-guaranteed loan to certify that he or she intends to personally occupy the property as his or her home.”

Basically, anyone getting the loan must live in the home, ruling out renting the property, using the building exclusively for work purposes or allowing friends or non-eligible family members to live there.

Also, occupancy must be met within “reasonable time,” which in most cases means 60 days. So, a home buyer must move into their new home within 60 days of the mortgage closing. They must also prove that the home is their primary place of residence.

These rules only apply for VA loans, though. For IRRRLs, the VA says that a homeowner must only prove that they have been living in the home. This makes occupancy for a VA refinance much less of an issue than for VA home loans.

Exceptions to the VA requirements

Here’s the good news for veterans, active military members and their families: there are plenty of exceptions to these requirements. Because military members can live more complicated lives than ordinary people, there are some common exceptions that apply to many VA members.

Deployed service members

Without exception, servicemembers who are deployed from their duty station are allowed to purchase a property in their place of permanent residence. This is because they are considered to be in temporary duty, and their place of permanent residence remains constant during this.

Veteran’s spouse or dependent child

Some active military members are VA loan eligible but are on active duty and away from their place of permanent residence. If this is the case, the spouse or dependent child of the VA member can occupy the house and satisfy the occupancy requirement.

Also, if the VA home buyer is no longer in the military but is temporarily away for work reasons, a spouse or dependent child can also satisfy the occupancy requirement.

Future move-in

If the veteran can prove that they will move into the home on a specific date or at some point in the future beyond the accepted 60-day period, the VA may extend the requirement by up to 12 months from the closing of the loan. Any period longer than 12 months is typically not accepted.

Future retirement

If the veteran intends to retire within the next 12 months and plans to move into the home, this can be approved.

For this to happen, a careful evaluation of the veterans’ income will be necessary, as will a specific date of retirement within the next 12 months.

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Repairs/improvements needed

Many homes purchased with VA loans need repairs or improvements. If this is the case, the reasonable time of expected occupancy can be extended. The length of the extension depends on the scale and scope of the project.

Other possible circumstances

Again, military members have different lives than many other people. Because of that, there are plenty scenarios bound to pop up that could get in the way occupancy. The VA is prepared for this, and occupancy requirements can be changed for these unique scenarios.

If you’re looking to purchase a home with a VA loan and are worried about occupancy requirements, speaking with a VA loan officer could be a great first step. They should be able to help you find out if you’re eligible with your current situation.

Can I rent a home purchased with a VA loan?

Yes, but with some contingencies. The VA loan program is intended to get veterans into home rather than to help people purchase vacation homes or investment properties. However, if you’ve met the owner-occupancy-rule then you may be able to refinance and rent the home when you move into a new home.

How long do you have to occupy a VA loan home before renting?

The VA does not have a rule specifing how long you must occupy a rental before you can refinance — and potentially rent the property. Your indiviual lender probably will have paperwork at closing indicating an intention to stay in the home for at least 12 months after closing, and they’ll have guidelines on what to do if you plan to stop occupying the home earlier than that.

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