VA loans help veterans as well as active service military personnel buy their dream home. However, this type of home loan can’t be used for purchasing anything other than a primary residence. For this purpose, the U.S. Department of Veteran Affairs or VA, has laid out some occupancy requirements, which borrowers need to fulfill in order to qualify for a loan.
The law requires that the prospective homeowners who want to obtain a VA loan should certify that they intend to use the property as their primary residence. The homebuyers need to occupy the home within 60 days of closing a VA loan. For some veterans, the occupancy requirements of VA loans seem quite confusing.
Occupancy Requirements of VA loans
The occupancy requirement varies based on the situations of the borrowers. This is the reason why it’s important to understand the various provisions that they are entitled to. The primary requirement is that the borrower should personally occupy the home within a reasonable time after the funding of the loan.
The reasonable time can be defined as 60 days after the closing of the loan. However, the reasonable time can be extended in the case that a specific date has been mentioned and the future events make this unattainable. Here are some of the factors that will help you in understanding VA loans:
Primary Residence Requirements – As mentioned earlier, people who apply for a VA loan must intend to occupy the property as their primary residence. Second homes and investment homes don’t qualify for occupancy requirements.
Occupancy by a Spouse - In certain cases, the spouse of a borrower can satisfy the occupancy requirements. If a borrower is an active duty personnel, then their spouse can fulfill the occupancy requirements.
Dependent Occupancy - A dependent child can occupy the home when their parent or parents are on active duty. However, it is important to remember that you cannot fulfill the occupancy requirements just by having a dependent. You also need to submit an occupancy certificate issued by either your attorney or the legal guardian of the dependent.
Deployed Active Service Members - If you get deployed after purchasing your home, then your occupancy status will not be affected. You will be considered as “temporary duty status”.
Delayed Occupancy - Property repairs or home improvements can result in a delayed occupancy. In case you need to make extensive repairs to the property which then prevents you from occupying the home, then the occupancy requirements will be considered as delayed.
If you fail to occupy the home as per the agreed terms of VA loans, then the next course of action will be based on the discretion of the Department of Veteran Affairs.
Darrick is a financial expert who has specialized in the domains such as real estate, mortgage and consumer finance. With his in-depth knowledge and vast experience of these industries, he has helped numerous financial and mortgage companies on operational restructuring and regulatory compliance issues. For the past few years Darrick has been writing regular columns to share his knowledge with the potential consumers and industry professionals by providing insights into the Veteran Affairs (VA) loan. His tips on VA mortgage are quite useful for military veterans, who are looking to buy their dream home to settle down.