Hello everyone. I hope you’re having a great day. I want to welcome you to the Veterans Guide Reddit questions that we’re going to answer. Normally, I focus on VA disability, but today we’re going to focus on the VA home loan process and how we can help you get your VA home loan. Today, I’m joined by Jodi Ulrich from Novus Home Mortgage, and he’s going to help us answer a few questions.
My name is Jodi Ulrich. I’ve been doing mortgages for 22 plus years, specializing in coming alongside clients, walking them through the process, and really just helping them get into homes. I’m excited to be here, share some of our knowledge, and figure out how we can get veterans into more homes. Normally, I’m answering Reddit questions about VA disabilities, and today we’re going to answer questions about VA home loans. I brought in a professional to answer these Reddit questions for you. Jodi, are you ready to get started?
Yeah, thanks, Robert. Excited to be here. Ready to get some of these questions answered.
Jodi, I’m going to start off with the first one. Someone said, “I have a current VA loan on my primary residence. I am purchasing a new home on a VA loan and am listing my house this week. I’m worried about losing a home I like under a first-rate offer with my current house selling being a contingency. Is it possible to be approved for a VA loan on a second home if I intend to sell my current one?”
Yeah, that’s a great question, Robert. A lot of clients come with that similar question because it is a competitive market out there. The short answer is yes, you can absolutely get into another property if you have enough entitlement left on your VA benefit. You can get into another property without selling your existing one. If you do intend to sell your existing property, we can also work on getting your entitlement restored after the loan closes, which gives you your full entitlement back. This is something any VA home lender can help walk you through.
So, I’ve got a follow-up question about entitlement. Can you explain to them exactly how entitlement works when you have a first home purchase and a second home purchase? Let’s say the total entitlement was a million, but your first home was purchased for $500,000. How would the entitlement work in that case?
So, entitlement is the amount the VA guarantees, which is 25% of your home loan in case of a default for the lender. The entitlement amount is usually limited by the county loan limit. If it’s your first-time use, there’s no loan limit. If you’ve used part of it, there’s a calculation to determine how much entitlement you have left to see if you qualify for 100% financing. Your lender will help you with this process to determine if a down payment is required. The entitlement is 25% of the county loan limit minus the 25% of the amount you’ve used. It’s a specific calculation, and your lender will walk you through it.
Alright, Jodi, our second question comes from Emotion Alternative 82. “How do I buy a house as a first-time buyer with a VA home loan?”
You need what’s known as a certificate of eligibility. If you don’t have that on file, you can request one from the VA or talk to a VA home loan lender to start the process. It’s not much different from the regular home purchase process. You’ll want to engage with a VA-approved lender, who will look at your income, assets, and walk you through the process. They will assess your debt-to-income ratio and total assets, then make sure you qualify for the VA home loan by reviewing your certificate of eligibility.
With the certificate of eligibility, does the veteran have to do it themselves, or can you assist them through that process?
The veteran can do it themselves, but as a VA home loan lender, we can definitely assist them. The process can often be done electronically by the lender through the VA website. Sometimes we need to submit a full application using the veteran’s DD214 or point statement.
Our next question comes from Sure King 758: “If I have no income, can I use my spouse’s income to qualify for a VA loan?”
Yes, Robert. We can use the spouse’s income to qualify for a home loan, assuming that the spouse is on the loan. They must qualify for all the necessary requirements like debt-to-income ratio and loan-to-value ratio, but we can use the spouse’s income to qualify.
What about a veteran’s disability? Does that qualify as income when applying for a loan, even if the spouse is mainly bringing in the income?
Yes, the veteran’s disability income does qualify. It will show up on their certificate of eligibility when we pull it from the VA, so it can definitely count as income for the veteran.
Our next question is from Embarrassed Bag 3189: “Can you buy a home with a VA loan to then rent it out?”
Yes, great question, Robert. Unfortunately, you cannot purchase a home with a VA loan to rent it out initially. The expectation is that you’re going to live in the property for a period of time, usually about 12 months, before you can rent it out. However, many veterans, especially active military members, may move around frequently. In such cases, they can rent out the property after that 12-month period, but the VA benefit is for primary residences only.
I’ve got a follow-up question about that. What if it’s a duplex or a quadplex? Can you purchase it, make it your primary residence, and rent out the other units?
Yes, absolutely. You can use your VA benefit for a duplex, three-family, or four-family property as long as you live in one of the units for the required 12-month period. Many veterans use this strategy to offset their mortgage payment, making homeownership more affordable. It’s definitely an option worth considering.
Our next question is from Big Assessment 4481: “My income is $74,000. I have about $33,000 in credit card debt, and my DTI is 18%. Do I qualify for a VA loan?”
We don’t have the full credit profile here, but 18% debt-to-income ratio is well within what the VA is looking for. The VA typically allows a debt-to-income ratio of up to 41%, although you can exceed that depending on your overall credit and income profile. In your case, 18% is a strong position, and there’s a good chance you’d qualify for a VA loan. We’d also look at your residual income and other factors to make sure you meet all the VA requirements.
Does utilities and insurance count toward the DTI ratio?
Taxes and homeowners insurance count toward your debt-to-income ratio, while utilities are factored into your residual income calculation. There are two calculations we consider: one for DTI (taxes, insurance, principal, and interest) and one for residual income, which accounts for utilities and other living expenses.
Next, we have a question from I Will Find My Purpose: “I need help understanding the six credible years requirement.”
The six-year requirement applies to veterans who served in the National Guard. They must have completed six years of service, or served 90 days of active duty, with 30 of those days being consecutive. If they’ve been in the National Guard for six years, they’ll get a point statement, which we can use to pull their certificate of eligibility for a VA loan.
Can you use a VA loan if you’ve filed for bankruptcy?
Yes, bankruptcy is not a disqualifier as long as the proper time has passed. For a Chapter 7 bankruptcy, you need to wait two years from the discharge date. For Chapter 13, you can qualify after 12 consecutive payments, with court approval from the trustee to take on new debt. Bankruptcy does involve waiting periods, but it’s not an automatic disqualifier.
If a veteran hasn’t met the timeline, are you willing to work with them and guide them through the process?
Yes, absolutely. Even if it’s only been 18 months since a bankruptcy discharge, we can guide veterans on what steps they should take to prepare for homeownership. Sometimes people think they need to wait longer, but reaching out earlier is always better. We can help fix things over time and walk them through the necessary steps.
Our next question comes from Mama Bear Button: “What is the process of selling a home when I used a VA loan?”
The process of selling a home with a VA loan is similar to a regular sale. You’ll engage with a real estate agent, list the property, and pay off the VA loan. One of the benefits of a VA loan is that it’s assumable, meaning someone else can take over your loan. This is beneficial if they’re entering into a lower-rate mortgage. However, the VA entitlement will be tied up until the loan is fully paid off, either through a sale or refinancing.
Can the new homeowner refinance after assuming the loan?
Yes, the new homeowner can refinance the loan if they can get a better rate. Once the VA loan is paid off, your entitlement will be restored.
Can you use a VA loan for construction?
Yes, the VA offers a home construction loan, but the construction company must be VA-approved. If they’re not, we can help them get approved. Many veterans also use traditional construction loans and then refinance into a VA loan once the property is completed.
Can you include the land with the home purchase?
Yes, you can either buy land and build the property with the VA loan or just use the VA loan for construction if you already own the land. Either option is available.
Can you be denied for a VA loan based on damage observed in an inspection?
The VA has minimal property standards. If the property has safety concerns or structural issues, it might need repairs before the loan can be approved. For example, electrical issues, a leaky roof, or foundation problems would need to be fixed before proceeding. In some cases, we can hold back money in escrow to cover repairs after closing.
What if the property’s appraised value is higher than the purchase price?
If the appraisal comes in higher than the purchase price, you have instant equity. However, the loan amount will be based on the purchase price. If you want to add upgrades like a pool or make repairs, they need to be completed before closing. Some repairs, like a roof, might be done after closing if it’s too cold or difficult to complete before.
Is there anything else you’d like to mention for the viewers?
Absolutely. If you have any questions, feel free to reach out to me. My contact information is in the link below. I’m always happy to answer your questions and guide you through the home loan process. Thanks for having me, Robert. I’ve enjoyed answering these questions.
Thanks, Jodi. If you have any questions, drop them below, subscribe, click the link to reach out to Jodi, and we appreciate your time. Have a great day!
