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 203(k) loan program provides qualified borrowers with an FHA guaranteed loan for rehab homes. This loan is for those who want to live on the property to be improved as the primary residence, it's not meant for landlords or investors.
The FHA has a variety of options for people want to buy, refinance or improve a home. It's wrong to assume FHA loans are aimed only at first time home buyers looking for traditional suburban homes.
FHA home loans cover a wide range of needs--they aren't simply for the traditional home in the suburbs; there are FHA insured loans for condos and also FHA mortgages for manufactured housing.
FHA insured loans for single-family homes are intended for the buyer to purchase property that is primarily used as a living space. Limited business use of such properties is permitted, but the FHA has strict rules governing how much of the property may be dedicated for business purposes such as a storefront, office space or storage facility.
Manufactured homes are often sold and transported in sections to be assembled on-site. Some buyers may wonder if the assembly counts as construction, and would such construction reclassify the manufactured home in the eyes of the FHA?