Yes, you can use a VA loan for a second home. The Department of Veterans Affairs (VA) provides eligible veterans, active duty servicemembers, and surviving spouses with the opportunity to obtain a VA loan to purchase a primary residence. However, the VA loan benefit can also be used to finance the purchase of a second home, under certain circumstances.
1. Two VA Loans at Once
If you have already used your VA loan eligibility to purchase your primary residence, you might wonder if you can still utilize a VA loan for a second home. The good news is that it is indeed possible to have two VA loans at the same time, as long as you meet certain criteria:
- You must have enough remaining entitlement to cover the second loan.
- Your second home must serve as your primary residence for a significant portion of the year.
- Your income must be sufficient to cover both mortgage payments.
By meeting these requirements, you can apply for and use a VA loan for a second home without having to sell or refinance your primary residence.
2. VA Jumbo Loan for a Second Home
If you are interested in purchasing a more expensive second home that exceeds the standard VA loan limits, you have the option to apply for a VA jumbo loan. A VA jumbo loan allows you to secure additional financing beyond the standard VA loan limits, making it possible to purchase a higher-priced second home.
Here is a look at the maximum loan limits for VA loans in 2021:
|Loan Limit with No Down Payment
|Standard VA Loan
|VA Jumbo Loan
|Varies by County
This table provides an overview of the standard VA loan limit and highlights the fact that the loan limit for a VA jumbo loan varies depending on the county in which the property is located. Therefore, if you are considering purchasing a higher-priced second home, a VA jumbo loan can help make that possible.
3. Occupancy Requirements for Second Home
When using a VA loan for a second home, it is important to understand the occupancy requirements. While a second home typically refers to a property used for vacation or recreational purposes, the VA has specific occupancy requirements for second homes:
- You need to occupy the property as your primary residence for a significant portion of the year.
- You should have plans to reside in the home for at least five consecutive years after purchasing.
- Residing in the home for less than five years may require you to sell the property or prove alternative primary residence options.
By meeting these occupancy requirements, you can satisfy the VA’s guidelines and use your VA loan benefit to purchase a second home.
4. VA Loan Second Home Refinance
If you already own a second home financed with a conventional mortgage or another type of loan, you might wonder if you can refinance it with a VA loan. The VA offers the option to refinance a second home using a VA loan through its Interest Rate Reduction Refinance Loan (IRRRL) program.
The VA IRRRL program allows you to refinance a non-VA loan into a VA loan, providing you meet certain eligibility requirements. It offers a streamlined process and does not require an appraisal or income verification. However, it is important to note that the property must have previously been financed with a VA loan or currently be your primary residence.
5. Working with a Knowledgeable VA Loan Specialist
When considering using a VA loan for a second home, it is crucial to work with a knowledgeable VA loan specialist who can guide you through the process. They can help you understand the requirements, identify if you are eligible, and answer any questions you might have regarding financing a second home with a VA loan.
In conclusion, while the primary purpose of a VA loan is to help veterans and active servicemembers purchase their primary residence, it is possible to use a VA loan to finance a second home. Whether you are looking to have two VA loans simultaneously, finance a higher-priced second home with a VA jumbo loan, or refinance an existing second home, it is essential to understand the specific requirements and seek guidance from a VA loan specialist.