For those wanting to finance a property with zero money down with competitive rates and lower closing costs, hands-down the VA home loan program is without peer. That is of course if you’re eligible for the benefit. The VA home loan is available to veterans, active duty with 181 days of service, qualifying National Guard and Armed Forces Reserve members and certain surviving spouses of those who have died as a result of service related injuries.
This program has been in existence since 1944 and originally designed to help returning soldiers more quickly assimilate to civilian life and help those buy a home of their very own in an environment where down payment requirements kept many on the home buying sidelines. Yet the VA program is reserved for those who will occupy the property as a primary residence and can’t be used to finance rental homes. The VA requires borrowers who close on a VA home loan to occupy the property within a reasonable period of time, typically 60 days after the closing. But what if you can’t quite meet that deadline? What if you’re deployed for much longer than 60 days?
If you’re active duty, your spouse can fulfill the occupancy requirement for you as well as act as your Power of Attorney when signing your closing papers. If you’re not married and deployed you need to speak with your VA lender and explain your situation well in advance. There may be exceptions to the 60 day rule but you need to clearly document your situation although this might be a challenge. You may also have a legal “attorney-in-fact” to act as your legal representative and fulfill the occupancy requirement as long as the individual does in fact live in the property.
If you’re a single civilian working overseas, you’ll have to document how long you’ll be away and the property can’t be rented to anyone else. Married civilians that are VA eligible can have the spouse fulfill the occupancy requirements.
VA loans take the occupancy issue rather seriously and it’s not uncommon for a lender who has placed a VA loan to send an inspector two or three months to the property to see who’s living there. If the inspector knocks and someone else answers the door and it’s not you or your spouse, the loan can be rescinded. Buying in instances where occupancy may be an issue means there really must be a compelling reason to move forward with the purchase. Otherwise, it might be better to wait until you’re stateside once again.