FHA Loan Articles
News, updates, and explanations to keep you informed.
VA Occupancy Rules
When you start preparing to apply for a VA home loan, the VA occupancy rule is one of the first things you'll learn about. In order to be approved for a VA mortgage, you must certify you intend to use the home as your main residence. The "primary borrower" agrees to start using the home as the primary residence within what the VA calls a "reasonable time", usually two months after closing on the loan or when the house is completed in the case of a custom built home. You can apply for an extension on the two month requirement if circumstances require it, but any delay in moving in longer than 12 months is not considered a reasonable amount of time by the VA. The occupancy rule applies to all primary borrowers listed on the VA home loan.
The VA occupancy rule precludes summer homes. It's impossible to certify a summer house as a primary residence--your occupation is seasonal and in the eyes of the VA the home stays empty for most of the year. Even if you have residents on the property, the primary borrower is not among them except for a limited time.
One issue that brings compliance problems with the VA occupancy rule? Deployments and permanent change of station orders. If you've received a VA mortgage loan and later get reassigned to a new base, how does the primary borrower serve elsewhere and stay within the rules? If a military spouse stays behind and remains in the home, there is no compliance problem--but a military member can't bring the family to the new duty station, and have relatives move in to the home purchased with a VA loan. That unfortunately doesn't meet the requirements of the law.
Are you a frequent traveler? Do you spend long periods of time away from the home? On a case-by-case basis you may find the VA occupancy rules flexible--under the right conditions. The home owner must not have a primary residence someplace else, and must show a consistent record of living where your VA home loan was issued. You can show continuous residence by your cable bills, water and trash services, and other billing statements that establish proof you live in the area. Depending on current legislation or changes to VA regulations, you may be asked to show other proof of residency. Check with your loan officer and VA representative to learn the most up-to-date requirements on showing proof of residence and how to submit it if you are a frequent traveler with a VA home loan.
FHA NEWS and RELATED ARTICLES
The FHA Premium Refund is for those with FHA loans acquired on or after September 1, 1983 and who paid an up front mortgage insurance premium on the closing date of the loan.
Home Affordable loan modifications are offered as a government homeowner bailout program designed to help qualified borrowers who can no longer afford their monthly loan payments.
FHA loan requirements include a maximum debt to income ratio. When a borrower applies for an FHA mortgage, they are required to disclose all debts, open lines of credit, and all possible approved sources of regular income.
A new program modifies the Making Home Affordable program and the FHA's own refinancing programs, allowing FHA lenders to offer FHA refinancing loans that forgive at least 10% of a qualifying borrower's original mortgage principal.
The FHA short refinance option is a refinancing plan for borrowers who do not have FHA loans and are current on their mortgage payments, but are underwater on their mortgages.