Can I Use a VA Loan to Purchase Multi-Family Property?
Posted 08-26-2014 at 01:37 PM by MarkHafeli
God bless America! Yes, you can use a VA loan to purchase a Two Flat, Three Flat or Four Flat in Chicago or anywhere else in the nation. Instead of buying that condo or single family home, buy a four flat, call it home and live for free from the rents of the other three units! What better way to start a new career in Real Estate Investing? To be eligible, you must be one of the following:
Veteran
Current or former National Guard or Reserve member who has been activated Federal active service
Active Duty Service member
Current National Guard or Reserve member who has never been Federal active service
Discharged member of the National Guard who has never been activated for Federal active service
Discharged member of the Selected Reserve who has never been activated for Federal active service
A Surviving Spouse in Receipt of DIC (Dependency & Indemnity Compensation) benefits
A Surviving Spouse and are not receiving DIC (Dependency & Indemnity Compensation) benefits
Assuming that you fit into one of these categories, the next step would be to speak to a lender who specializes in VA loans about the Certificate of Eligibility that is needed. Not all lenders will be well-versed with these loans, so save time and effort by using someone that’s closed a few of these before.
Using a VA loan in the end will be somewhat similar to a normal home purchase, but here are some of the highlights that you should be aware of:
For Illinois, the VA Loan Limit for 0% down (that’s correct, NO DOWN PAYMENT) for all counties is $417,000.
For Illinois, the VA Max Guaranty is $1,000,000. But once you get over $417,000, the lender will likely ask for a down payment from the buyer. Here is a good tutorial on how those down payments may be calculated.
Can be used to purchase 1-4 unit buildings, or 1 unit condo/townhomes, but buyer must occupy one or all of the units.
Cannot be used to purchase 5+ unit multi-family buildings.
No private mortgage insurance premiums (PMI).
Mortgage is assumable meaning that you can transfer the loan with the property to a new buyer or relative. Conventional loans typically aren’t assumable. This is a huge benefit especially as interest rates are on the rise.
Limited closing costs.
Closing costs can be paid by seller.
Don’t have to be a first-time buyer.
You can re-use the benefit.
Credit scores, payment history and debt-income ratios are still important and will be considered for the approval of the loan.
Appraisal is still required.
75% of the rents from the non-occupied units will be used to help you qualify!
If you need help finding a VA Lender or a two flat, three flat or four flat in the Chicago area, I’m happy to assist.
See the full blog at www.chicagoreinvestment.com
Veteran
Current or former National Guard or Reserve member who has been activated Federal active service
Active Duty Service member
Current National Guard or Reserve member who has never been Federal active service
Discharged member of the National Guard who has never been activated for Federal active service
Discharged member of the Selected Reserve who has never been activated for Federal active service
A Surviving Spouse in Receipt of DIC (Dependency & Indemnity Compensation) benefits
A Surviving Spouse and are not receiving DIC (Dependency & Indemnity Compensation) benefits
Assuming that you fit into one of these categories, the next step would be to speak to a lender who specializes in VA loans about the Certificate of Eligibility that is needed. Not all lenders will be well-versed with these loans, so save time and effort by using someone that’s closed a few of these before.
Using a VA loan in the end will be somewhat similar to a normal home purchase, but here are some of the highlights that you should be aware of:
For Illinois, the VA Loan Limit for 0% down (that’s correct, NO DOWN PAYMENT) for all counties is $417,000.
For Illinois, the VA Max Guaranty is $1,000,000. But once you get over $417,000, the lender will likely ask for a down payment from the buyer. Here is a good tutorial on how those down payments may be calculated.
Can be used to purchase 1-4 unit buildings, or 1 unit condo/townhomes, but buyer must occupy one or all of the units.
Cannot be used to purchase 5+ unit multi-family buildings.
No private mortgage insurance premiums (PMI).
Mortgage is assumable meaning that you can transfer the loan with the property to a new buyer or relative. Conventional loans typically aren’t assumable. This is a huge benefit especially as interest rates are on the rise.
Limited closing costs.
Closing costs can be paid by seller.
Don’t have to be a first-time buyer.
You can re-use the benefit.
Credit scores, payment history and debt-income ratios are still important and will be considered for the approval of the loan.
Appraisal is still required.
75% of the rents from the non-occupied units will be used to help you qualify!
If you need help finding a VA Lender or a two flat, three flat or four flat in the Chicago area, I’m happy to assist.
See the full blog at www.chicagoreinvestment.com
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I am retired and thinking of moving to rural yancey county - 10 min from Bville. I am gay, will I have trouble with neighbors or anyone? I do not cause any trouble and I just want peace and quiet for my dog and me....Posted 08-27-2014 at 01:46 PM by alan carter
