When you decide to use a VA Loan, you may be excited about the prospect…
The VA Loan was first developed after World War II to make home ownership more accessible to the military service members returning from war. They had not had years to build up a cash reserves to use as a down payment. So the Department of Veterans Affairs eliminated the requirement for a down payment for those military service members and Veterans who qualified.
The VA Loan does have some stipulations about how it can be used. Specifically, the borrower must intend to occupy the property as their primary residence. This means that they cannot use the VA Loan to purchase an investment property.
There are some cases where military members purchased a property using their VA Loan and later move away. Some prefer to sell the home, either to another VA Loan eligible individual or someone using a different method of financing. Some want to rent the home out when they move away. Is this allowed?
Can You Rent Our The Home?
Yes, you can rent out a home that you purchased with your VA Loan. The important thing is that you intended to occupy the home as your primary residence when you purchased it. If you can show that you did occupy the home and later moved due to a change in job, a growing family, or any other reason, you generally won’t have any issues. If you purchase a home with the VA Loan and decide to move away within just weeks, the Department of Veterans Affairs may question if you actually intended to use the home as your primary residence unless you have a very compelling reason why your plans changed.
If you do rent your home out after purchasing it with the VA Loan, it might impact the amount of taxes that you pay on its sale if you sell it in the future. It also means that you can’t use your full VA Loan entitlement on the purchase of another home unless you refinance into a conventional mortgage on your first VA Loan home purchase.