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Like the other government-backed loans, VA home loans have occupancy requirements that help keep the program’s focus on primary residences.
Service members who secure a VA purchase loan have to certify that they intend to personally occupy the property as their primary residence. VA borrowers usually have a 60-day window after completing the loan process to move into the house. Requirements can differ on VA refinance loans.
Some homebuyers find that two months isn’t enough time. The VA does allow buyers in certain situations to go beyond that 60-day mark, although occupancy delayed more than a year is generally unacceptable.
Here are a few common situations and possible outcomes:
- Active duty borrower
For married service members, your spouse can fulfill the occupancy requirement. Lenders will typically take your travel and living expenses into account when evaluating your finances. That means including those costs into your DTI ratio and residual income calculations. Single military members who are deployed can also fulfill the occupancy requirement, because VA considers them to be in a temporary duty status
- Married civilian borrower working overseas
A spouse can often fulfill the occupancy requirement in these situations. Lenders will consider your travel and living expenses.
- Single civilian working overseas
This can be more challenging and depends on a number of factors. You may need to show that you’ll be home significant portions of the year and have ties to the area. Lenders will consider travel and living expenses and likely want to verify who will care for the home in your absence.
- Married civilian working in the U.S. and looking to purchase elsewhere in the country for family
This can also be challenging. Borrowers may need to show that they’ll be occupying the new home sometime in the near future, or that they can’t live with their family for reasons beyond their control. Lenders will also consider your travel and living expenses.
- Single civilian working in the U.S. but looking to purchase elsewhere in the country
This scenario won’t generally be acceptable to the VA or lenders.
Every occupancy scenario is different, and requirements and policies can differ among lenders. For example, a military dependent could fulfill the occupancy requirement in some cases. Or you may be able to delay occupancy if you're purchasing a property that has renters finishing up an active lease.
If you think you might have difficulty occupying a home within 60 days of closing, let your loan officer know as soon as possible. Depending on your unique situation, there may be an exception or a workaround.
The key when it comes to occupancy is clear communication with your lender and your loan specialist. The VA and lenders share the same goal — helping veterans become homeowners.
Every occupancy scenario will need to be developed in more detail before a lender makes a decision about whether to move forward. Be as honest and forthright as possible. Exceptions and workarounds are possible.
For example, plenty of overseas contractors and active military members close on VA home loans each month. Service members utilizing Power of Attorney during the homebuying process will also want to communicate that fact to lenders as early as possible.
VA also allows for what's known as intermittent occupancy, which allows qualified buyers to obtain a loan even though they're not living at the property every single day.
Talk with a Veterans United loan specialist about your unique occupancy situation and what might be possible.