Can I Rent My Home With A VA Loan? A Guide to Renting After Using a VA Mortgage

If you have purchased a home using a VA loan, you may be wondering if you can rent it out at some point Many homebuyers get VA loans because of the great financing options and lack of down payment However, VA loans do come with occupancy requirements. So what happens if you need to move or want to turn your property into a rental?

The good news is that yes you can rent out a home that you purchased with a VA mortgage under certain conditions. Let’s take a closer look at when and how you can become a landlord after using your VA home loan benefit.

VA Loan Occupancy Rules

The VA home loan program exists to help veterans active duty service members reservists, and surviving spouses purchase a primary residence. This means when you get a VA mortgage, you agree to move into the home within 60 days and live there for at least one year.

These occupancy rules are in place because VA loans offer unique advantages like no down payment and no mortgage insurance that conventional loans do not. The program wants to ensure borrowers are using the loans for their intended purpose – to become homeowners.

When Can You Start Renting Your VA Home?

You are allowed to rent out your VA-financed property after meeting the occupancy requirements. This means living in the home as your primary residence for a minimum of 12 months after closing on the mortgage.

There are some exceptions to this guideline. For example, if you have orders for a permanent change of station (PCS), the VA may grant an exception allowing you to rent out the property early. Or if you refinanced into a VA interest rate reduction loan (IRRRL or streamline refi), there is no occupancy requirement at all.

But in most cases, you’ll need to wait 12 months before turning your VA home into a rental property. Keep careful records showing you lived there as your primary home during that time.

Tips for Renting Your VA Home After 12 Months

If you’ve lived in your home for a year – or you’ve been assigned to a new duty station before the 12-month benchmark – you can rent out your VA loan-financed house. Your tenant won’t need to be a service member or veteran who qualifies for a VA loan.

Here are some tips for renting out your home after using a VA mortgage:

• Notify your lender that you are moving out and renting the property. Keep them updated with your new address.

• Review your home insurance policy. You may need to switch to a landlord policy when you start renting the home.

• Screen potential tenants thoroughly. Run background checks and get references. Require renters insurance.

• Use a lease agreement. Spell out rules, rent due dates, security deposits, and more.

• Collect a security deposit equal to one month’s rent to cover any damages.

• Set aside funds for maintenance and repairs. Budget for regular upkeep and unexpected issues.

• Hire a property manager if you will be away. They can handle screening tenants, collecting rent, and maintenance.

Can You Get Another VA Loan?

If you are moving into another home, you may be interested in using the VA loan benefit again for your new primary residence. The good news is that yes, you can qualify for another VA mortgage after renting out your current home.

Your eligibility will depend on a few factors:

• Your VA entitlement – This refers to the amount of your loan guarantee. It may be less on a second VA loan.

• Your loan limits – The VA has maximum conforming loan limits that may cap your second VA mortgage.

• Lender approvals – The new lender will ensure you have enough income to support both mortgages.

As long as you meet VA requirements and your lender approves the second loan, you can tap into your VA benefits again. Just be sure your loan officer is aware that you have an existing VA mortgage on a rental property.

Alternatives to Renting Your VA Home

Renting out your property is not the only option if you need to move after using a VA loan. Here are a couple other paths to consider:

• Sell the home – You may decide it’s easier to sell your current house rather than become a long-distance landlord. Use proceeds to pay off your VA loan and buy a new home.

• VA loan assumption – Find a qualified veteran buyer to assume your existing VA mortgage when you move.

• Service member civil relief act – If you are active duty and receive PCS orders, you can end your current VA loan without penalties.

Discuss these alternatives with your lender to see if they may be a better fit for your situation.

Wrap Up

While VA loans require you to live in the home, you can rent out your property after meeting occupancy rules in most cases. This allows you to keep your existing home as an investment and tap into your benefits again for a new primary residence if needed. Just be sure to understand the VA guidelines and lender requirements before becoming a landlord of your VA-financed home.