VA Occupancy Requirements
When veterans, service members, and eligible family members apply for a VA home loan, they must comply with several rules concerning the occupancy of the home. The Department of Veterans Affairs’ focus is on ensuring the homes purchased with VA loans are primarily for veterans’ personal use, not as investment or vacation properties. However, there are exceptions to these rules for active-duty service members, properties requiring extensive repairs, and other specific circumstances.
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On This Page
- What Are the VA Occupancy Requirements?
- Why VA Occupancy Requirements Matter
- How Long Do You Have to Occupy a Home with a VA Loan?
- Special Cases and Exceptions to VA Occupancy Requirements
- Can Your Spouse Fulfill the VA Occupancy Requirement?
- VA Streamline Refinance Occupancy Requirements
- Can You Rent Out Your Home?
- Ready to Start the Homebuying Process?
What Are the VA Occupancy Requirements?
The chief occupancy requirement for VA home loans is that the property must be used as the borrower’s primary residence. Thus, the borrower must live in the home purchased with a VA loan.
Under federal law, veterans obtaining VA-guaranteed loans must certify that they intend to personally occupy the property as their home within a reasonable time. As of the certification date, the veteran must either live in the property as their primary home or intend to move into it within a “reasonable time” after closing of the loan.
In general, a “reasonable time” means 60 days after closing. In some cases, a period of more than 60 days, but less than a year, may be considered reasonable if the veteran meets specific conditions.
The VA occupancy requirements apply to all types of VA-guaranteed loans except Interest Rate Reduction Refinance Loans, or IRRRLs. For IRRRLs, veterans must only certify that they previously occupied the property as their primary residence to be eligible for refinancing.
Why VA Occupancy Requirements Matter
The VA loan program requires that the home be the borrower’s primary residence, as the VA’s primary focus is on supporting veterans in stable, long-term homeownership. This process helps keep the VA home loan program running smoothly and protects veterans, ensuring that the benefits are used for their intended purpose and not speculative investments.
How Long Do You Have to Occupy a Home with a VA Loan?
In most cases, a basic 60-day timeline applies for veterans to occupy their new home after closing the loan. However, there is a possibility of extending the occupancy deadline in certain cases, such as for active-duty service members, veterans retiring, or those making repairs on the property.
More than 60 days may be considered reasonable if the veteran certifies that they will personally occupy the property at a specific date after loan closing. Additionally, there must be a particular future event that will enable the veteran to personally occupy the property as their home on a specified future date. Regardless, occupancy at a date beyond 12 months after loan closing is usually not considered reasonable by the VA.
Special Cases and Exceptions to VA Occupancy Requirements
- Active-Duty Service Members
Active-duty service members can still fulfill the occupancy requirement by certifying their intent to live in the home even if deployed. Establishing “valid intent” enables deployed service members to meet the occupancy requirement. - Spouse and Dependents
In some cases, a veteran’s spouse or dependent children can fulfill the occupancy requirement when the veteran is deployed or unable to live in the home due to a valid reason. Occupancy or intent to occupy by a spouse or dependent child satisfies the occupancy requirement for active-duty service members or veterans with distant employment other than military service who can’t personally occupy the property within a reasonable time. For an IRRRL, a certification that the spouse or dependent child previously occupied the home satisfies this requirement. - Retiring Service Members
Retiring veterans can negotiate for a later occupancy date if they are planning to retire soon after applying for the VA loan. If a veteran plans to retire within 12 months and wants to obtain a loan to purchase a home in their retirement location, their eligibility for retirement must be verified, and their post-retirement income must be taken into consideration. Only retirement on a specific date within 12 months qualifies. - Property Repairs
Veterans and service members purchasing a property that requires repairs to meet VA Minimum Property Requirements, or MPRs, can extend their move-in date to allow time for completing the necessary work. Home improvements or refinancing for extensive changes to the property that prevent the veteran from occupying it constitute exceptions to the “reasonable time” requirement. - Intermittent Occupancy
The VA allows intermittent occupancy in some circumstances, such as when a veteran’s job requires them to travel but they intend to return to the property as their primary residence. Generally, occupancy as a veteran’s home implies that the property is within a reasonable proximity to the veteran’s job. However, if the job requires them to be away for a substantial period, the veteran must have a history of continuous residence in the community and not intend to establish a principal residence elsewhere. Using the property as a seasonal vacation home does not meet the occupancy requirement. - Unusual Circumstances
Veterans can submit a request for approval if their circumstances don’t align with the typical occupancy rules. You can also discuss unusual circumstances of occupancy with your local VA office.
Can Your Spouse Fulfill the VA Occupancy Requirement?
Certain employment situations or life circumstances may permit a spouse to fulfill the occupancy requirement even if the veteran is unable to live in the home. For active duty service members and veterans with other distant employment who can’t personally occupy the property within a reasonable time, occupancy or intent to occupy a home by a spouse or dependent child satisfies the VA’s requirements.
VA Streamline Refinance Occupancy Requirements
The VA’s Streamline Refinance program, also known as Interest Rate Reduction Refinance Loans or IRRRLs, only requires veterans and service members to prove they previously occupied the home to refinance, even if they are not currently residing there. IRRRLs allow veterans to refinance their existing VA home loans to a new one with a lower interest rate.
Can You Rent Out Your Home?
To rent out a home purchased with a VA loan, the veteran must have lived in the home for at least 12 months before renting it out. Veterans must notify their lender before renting out their home, as there may be specific lender policies or requirements that apply. For example, if a veteran living in a home bought with a VA loan is transferred elsewhere for work, they can rent out the home and refinance the loan with an IRRRL based on previous occupancy of the home.
Ready to Start the Homebuying Process?
Veterans and service members applying for a VA home loan should understand that there are rules concerning the occupancy of the home, since the VA intends loans to be used on homes that are primarily for veterans’ personal use, not as investment or vacation properties. These rules have exceptions for active-duty service members, properties that need extensive repairs, and other specific circumstances.
If you plan to obtain a VA-backed home loan or refinance your current loan into a VA loan, it’s essential to plan ahead to meet the “reasonable time” occupancy requirements. Work with your lender and your realtor to determine your timeline for the home loan process.
