The purpose of a VA loan is to provide affordable financing for current military, Veterans, and qualified surviving spouses to purchase, refinance, or build a primary residence. But sometimes there is a roadblock called the VA loan occupancy requirement. Although these solutions are not spelled out in the VA guidelines, we have a long history of helping Veterans and service members purchase a home where full time occupancy within 60 days is not possible. Recently, we have seen a surge in these requests. So, the goal of this article is to provide proof there are VA solutions to these primary occupancy issues. This is a long article. But, the reason is that there are so many VA loan solutions for a primary residence purchase. So, we want to share them. Check it out and contact us with your scenario.
VA Loan Occupancy Requirement Exceptions
Usually, the conversation starts out with something like this, “I have checked with several VA lenders and have been told I must live within a reasonable commuting distance as well as occupy the home within 60 days. Your article says different, so hopefully you can help.”. First of all, there are rules and not every scenario falls within VA guidelines. But, if you fit these categories and others, you may be able to get a VA loan. Here’s a list of the most common ways the VA eligible borrower may not occupy within 60 days. Then, we provide comprehensive answers to explain if acceptable to VA.
- Active duty unmarried buyer occupying within 12 months
- Active duty spouse to occupy home
- Caretaker or Veteran’s attorney in fact occupying home
- Single Veteran commuting 2 hours each way to work
- Single Veteran with a long commute living in another home during the week
- Married Veteran buying home for spouse and family while working & living elsewhere
- Single Veteran, Traveling Sales Person out of town 3 weeks a month
- Single Veteran Works & rents in Raleigh NC but wants to buy a home in California with hopes of getting a transfer
- Married Veteran living in nursing home purchasing a home for spouse
Active Duty Unmarried Buyer
When a VA loan borrower is active duty, the standard rule is that the service member must “generally” occupy the home within 60 days. Being that the buyer is not married, there is not another person to satisfy the occupancy requirement. BUT, VA guidelines actually allows an unmarried individual to occupy the home within 12 months. Not 60 days.
Active Duty Married Buyer
Anyone in the military knows how common it is for the service member to be apart from the family for extended periods of time. Fortunately, VA understands this and thus allows the spouse to satisfy the VA loan occupancy requirement. Most lenders know this one. Therefore, buying a home where the spouse will occupy while the VA eligible buyer is active duty is no issue.
Caretaker or Veterans Attorney-in-Fact Can Occupy
Per the VA Circular 26-12-9, the caretakers or a Veteran’s attorney-in-fact of a Veteran’s child(ren) may now satisfy occupancy provided the Veteran will eventually reside in that home.
Single Veteran Commuting 2 Hours to Work
In order to use a borrower’s income, mortgage lending guidelines require that the home is a reasonable commute to their work. Commonly this is a one hour drive. Although, VA is more flexible in this area. For instance, if a single Veteran drives 2 hours one-way to work each way, it is allowed. The reason is that it is not uncommon for individuals to commute long distances to work each day. Truck drivers may drive all over the country, but may also easily meet the VA occupancy requirements.
VA Loan Occupancy Requirement: Single Veteran Commuting 4+ Hours and Lives with a Friend During the Week
Let’s take the driving distance out even further. What if a Veteran works completely across the state or 4 hours away? Then, add that the Veteran lives with a friend or family member during the week closer to work. No way, right? Actually, the fact that the Veteran does not live in the home full time doesn’t mean the VA loan occupancy requirement cannot be met. This is called intermittent occupancy rules and can work for many Veterans.
Most Popular VA Loan Occupancy Requirement Request: Married Veteran Buying Home for Family While Working Elsewhere
This is the most common occupancy scenario we see Veterans getting denied. Again, not every scenario works, but many do. The reason this works is that the spouse may meet the occupancy requirement even if the Veteran lives across the country.
Several examples come to mind that we successfully closed in this category.
Veteran Must Live Near Job
We had an engineer that had to work close to the nuclear plant where employed. Yet, the family’s goal was to move near Charlotte. The spouse obtained a job offer for an airline and was required to live within a small distance from work. Additionally, the engineer (Veteran) has the goal of transferring to Charlotte when an opportunity arose. For the time being, they wanted to buy a primary residence of $515,000 near Charlotte using VA. We closed that loan because the spouse proved she would occupy. Furthermore, we counted the Veteran’s income and additional housing expense (lived rent free). Plus, the travel expense must be included in the qualification.
Veteran Only Has a Few Years Before Retirement
This one just happened and the Veteran was told no way by many lenders. The Veteran owns a small home in Michigan and has been employed there for 25 years. Meanwhile, their goal was to move to Myrtle Beach. So, the spouse moved first and has been living in an RV park for 10 months in Myrtle Beach. Also, the spouse has been working during this time in Myrtle Beach as well. Therefore, this one was pretty simple because the occupancy in Myrtle Beach has already been established. We were able to count income for both borrowers while including travel expense and all debts including the other housing expense. 100% VA financing!
Married Veteran Works Overseas and Spouse Occupies Home
Obviously, this is not a reasonable daily commute. For many years, Veterans have obtained contract or other employment overseas. Often, it is because the pay is so much higher. Meanwhile, the spouse and maybe children occupy a home in the U.S. Can a Veteran use VA to purchase a primary residence in this case? Yes! Actually, the VA loan occupancy requirement is met because a purchase provides a Veteran a permanent home in the U.S.
One client comes to mind that is a helicopter mechanic who works overseas 6+ months out of each year. Yet, his residence and family still purchased a home in North Carolina. VA loans have no issue with this and the home was purchased with no money down!
Single Veteran Traveling Sales Person Out of Town Most of the Month
Some jobs require much travel time. Overseas pilots, cruise ship employees, longshoremen, construction workers, shut down employees, and many more require long periods away from home. Not a problem with VA. Because a Veteran may still purchase a primary residence to come back home to. It may be as little has one week a month where the home is occupied!
Single Veteran Wants to Buy a Home Far Away With Hopes of Getting a Job There
This case is different from the other mentioned so far. “Hopes” is the key word. There is no job offer, spouse to occupy, or current job in the area of the new home. So living in NC and wanting to buy in CA with the hope of a job in the near future does not work for VA. This would be more like a conventional second home loan. Now, if the Veteran gets a solid job offer in the new area, there may be a solution here!
Married Veteran in Nursing Home Purchasing Home for Spouse
Regretfully, someone living permanently in a nursing home cannot use a VA loan to purchase a home for a spouse. Even though the spouse will occupy the home, if the Veteran would never occupy the home, then VA will not allow the spouse to satisfy the VA loan occupancy requirement. Although, temporarily being in a hospital would be different and should work!
VA Loan Occupancy Requirement and Other VA Guideline Experts
We don’t claim to know everything about VA loans, but we do our best to know or will find out all we can to give VA eligible borrowers the best chance possible for approval. Plus, we have a great staff of super knowledgeable VA underwriters that have our back! If you have an occupancy issue, check with us first.
Note: Always remember not to state false information on a VA loan or other mortgage. This would be mortgage fraud which has severe monetary penalties and prison.
Please check out other VA related articles that may help as well…
- VA funding fee exemption
- Waived property taxes for 100% VA disabled Veterans
- Use VA sales concession rules to your advantage when buying a home