Flipping homes has surged in popularity as an enticing investment avenue, promising substantial returns for those willing to take on the challenge. But for veterans considering utilizing a VA loan for flipping, questions often arise about the feasibility and restrictions involved. So, can you flip your home with a VA loan? Let's delve into the details.
Understanding VA Occupancy Requirements
The cornerstone of VA loan benefits is the requirement that veterans purchase homes they intend to occupy as their primary residence. This stipulation means that solely investing in properties without residing in them is not permitted under VA guidelines. However, this doesn't entirely preclude flip and rental opportunities.
Navigating the Guidelines
Technically, flipping a home with a VA loan is feasible, provided you adhere to the rules. VA regulations concerning property flipping are somewhat ambiguous, lacking a specific mandate on the matter. Instead, borrowers must comply with basic VA loan guidelines, notably intending to occupy the property full-time within 60 days of closing, with some exceptions to this timeframe.
There is no mandate dictating that you must inhabit the primary structure during renovations. For instance, living in a guest house or an RV on the property while renovating the main house is permissible, contingent on local laws and homeowners' association regulations. However, the property must pass the VA appraisal before closing can proceed.
The Live-In Flip Approach
Utilizing a VA loan for flipping houses is permissible under the condition that you reside on the property while conducting renovations, commonly referred to as a "live-in flip."
Dispelling the Myth: VA's 90-Day Flip Rule
Contrary to popular misconception, the VA does not enforce a 90-day flip rule . This is sometimes confused with the FHA flip rule. The absence of such restrictions offers veterans greater flexibility in managing their property investments.
Selling Your Home: Timing Considerations
With VA-guaranteed mortgages, there's no mandatory property ownership duration, granting you the freedom to sell the home at your discretion. Nonetheless, it's prudent to review your mortgage terms, as lenders may impose minimum occupancy periods.
Transitioning to an Investment Property
While VA loans prioritize owner-occupancy, veterans can explore the option of converting the property into a rental after residing in it for a designated period, typically 12 months post-closing. Exceptions may apply, such as relocations prompted by PCS orders for active-duty service members.
VA Loan Entitlement Post-Flip
It's essential to recognize that the utilization of your VA entitlement for purchasing a property is tied to that specific asset. Consequently, retaining the property as a rental or failing to repay the original loan in full can impact your entitlement availability for subsequent home purchases. However, selling the property to fully settle the VA loan can facilitate the restoration of your entitlement.
In essence, navigating the realm of flipping homes with a VA loan necessitates adherence to occupancy requirements and a thorough understanding of VA guidelines. By residing on the property during renovations and abiding by loan terms, veterans can leverage VA loans to pursue lucrative flipping ventures while honoring their commitment to homeownership.
Choosing Your Professional Team When Selecting the Home
Selecting the right professional team is paramount when embarking on your journey to find the perfect flip home. Partnering with a Loan Officer and Real Estate Professional who possess in-depth expertise in VA home loans and property requirements ensures that you navigate the process smoothly and confidently. For any inquiries regarding VA loans or other mortgage-related questions, feel free to reach out to Trish Cole at Veterans United Home Loans. With Trish's guidance and support, you can embark on your flipping venture with the assurance that you have a knowledgeable ally by your side every step of the way. Contact Trish Cole, Senior Loan Officer NMLS 120968 at Trish.Cole@vu.com or (253)770-5668, and let's turn your flipping dreams into reality.
PugetSoundVALoans.com. (253)617-6200. 10514 156th St E, Suite 104, Puyallup, WA 98374. Veterans United Home Loans is a VA approved Lender; Not endorsed or sponsored by the Dept. of Veterans Affairs or any govt. agency. NMLS #1907 (nmlsconsumeraccess.org) Equal Opportunity Lender.
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