None of the following is going to happen any time soon so I don’t need the answer fast.
One of the stipulations for a VA home loan is that it must be for your primary residence. No vacation home. No rental properties. My questions is, what if circumstances change? If I move out of my now primary residence and start using it as a rental property do I have to notify the VA? Will there be a status change on the loan? If all the world’s a stage, where does the audience sit?
From what I can tell, the conditions are imposed on obtaining a loan, not on maintaining one. This link (pdf) says “You must occupy or intend to occupy the property as your home within a reasonable period of time after closing the loan.”
I would expect that as long as you were honestly intending to use the home for your own personal occupancy at the time you obtained the loan, you would be in the clear. The VA would probably also question the sincerity of your intent to occupy the home if you, for example, moved out after only two or three months and turned it into a rental property.
It can also be a 2-4 unit multi-family property if you plan to live there.
IIRC, there is a minimum amount of time you must keep the home as your primary residence.
We had a VA loan for our home in SC. After several years we relocated to FL and kept it as a rental property (we will never long distance landlord again. When we went to clean the house to sell it we found the renter owned neither vacuum cleaner nor lawnmower. There were so many roaches I had to store my purse in the fridge. The property manager got quite an earful and the renter lost her deposit.)
Was it a minimum of two years? For some reason that length of time is shouting to me but things may have changed.
I have a VA loan on my house, and to my knowledge no one has ever tried to verify I actually live there.
Yeah regardless of the rules I think the only time it would come up is if you tried to get another loan.
Actually, it would probably come up if the loan went into default and the VA chose to examine the loan for fraud. If they could prove the borrower never lived there, and never intended to, the VA would likely investigate whether the borrower committed fraud when he certified his intent to live there or if the mortgage underwriter committed fraud, such as falsifying the application or certification.
It is my understanding that this is a requirement for most mortgages. I seem to recall that there is a clause requiring you to tell them if that circumstance changes. If you want a mortgage for a house you intend to rent, you need to tell them up front. Generally you will pay a higher rate for such a mortgage.
However, I have known several people who have rented out a house they lived in without notifying the bank. I don’t think the bank really cares as long as you pay the mortgage. The problem might surface if you subsequently defaulted, but I really don’t know what that would mean. IANAL
The requirement for the loan is from the VA. They are a guarantor of the loan. They do not issue the loan. The VA does not loan money that is done through regular loaners.
I’m a real estate attorney. There is a residency requirement in the standard mortgage document that is same for VA loans and residential mortgages. This is what it usually says:
You have to occupy the property within 60 days after closing and live there for at least one year. The bank will make you sign an affidavit at closing stating that you intend to occupy the premises withing 60 days of closing. You will also sign a mortgage with the above provision at closing.
I read somewhere that the most common form of loan fraud is lying about your intent to occupy the property as your primary residence. This is not surprising as residential loans have a lower interest rate and lenders do not check to see if borrowers will actually occupy the property.
If you lie on the affidavit, then that’s technically loan fraud, which is a felony. If you do not live on the property for a year, then that’s technically a default of the loan. The lender could foreclose or possibly accelerate the loan. I say technically because I’ve never seen this happen to anyone yet.