8 Steps to VA Loans for Multifamily Homes Revealed

Veterans can now be both homeowners and landlords! Yes, no pun intended here. All you need to do is buy a multifamily home with a VA loan, make it your primary residence by living in any one of the units, and rent out the other units.

But is it as easy as it sounds? You'll find out in today's article. I will share 8 steps to get your VA loan approved for a multifamily home, along with a few tips to keep in mind before making this big move. Let's get straight into it.

What Is a Multifamily Home?

Imagine a house with different sections where various families can reside. This could include a duplex (two homes in one building), a townhome, or even a large apartment complex with multiple families living there.

This type of housing arrangement is called a multifamily home. If you’re the owner of such a multifamily home, you can leverage it as a promising investment opportunity. But how can you finance your purchase? Let's see if a VA loan is the best option to purchase a multifamily home.

Can You Buy a Multifamily Home with a VA Loan?

Yes, you can! Just make sure you meet these requirements:

• ➙ You've served in the military and meet the basic requirements for a VA loan.

• ➙ Your credit scores, income, and debts meet the lender's standards.

• ➙ You can manage the next six months of mortgage payments.

• ➙ You are preparing to move into any one of the multifamily units within 60 days of closing and stay there for at least a year.

8 Steps to Get VA Loan Approved for Multifamily Homes

If you aim to make the most of this opportunity and get your VA loan approved without any hassle, these 8 steps will be invaluable throughout your application process.

• 1. Verify Your VA Loan Eligibility

  To verify, you'll likely need to apply for a Certificate of Eligibility to prove your veteran status. If you're a surviving spouse or in another eligible category, you can also show this certificate to qualify.

• 2. Understand Local Multifamily Loan Limits

  Find out the maximum loan amounts for multifamily homes in your area. While the VA doesn't set these limits, lenders usually follow local rules. These limits can vary based on where you live but generally depend on the number of units in the property.

• 3. Meet VA's Mortgage Requirements

  To best VA loan, you need to meet these criteria:

  • ➙ You usually don't need a down payment if you have enough entitlement.

  • ➙ Lenders prefer a credit score of around 620 or higher.

  • ➙ Your total debts should be less than 41% of your income.

  • ➙ You typically need at least two years of work history.

  • ➙ You'll need enough money saved up to cover a few months' worth of mortgage payments.

  • ➙ There's a fee called a funding fee, which varies based on factors like your down payment and whether you've used a VA loan before.

  • ➙ You'll need to show you have experience managing rental properties or hire someone who does.

• 4. Get your VA Home Appraisal Done

  Before you can get a loan, the property will need to be appraised. This means an appraiser will check its value and make sure it meets certain standards set by the VA. For multifamily homes, this process can be a bit more detailed and might cost more than for a single-family home.

• 5. Compare Offers from VA-Approved Lenders

  Look at loan offers from different lenders to find the best deal. They'll look at how much money they think you can make from renting out the property when deciding how much to lend you. Just remember, they can't charge you more than 1% of the loan amount for certain fees.

• 6. Hunt for the Perfect Property

  It's time to start looking for the perfect place to call home! Start by searching online or visiting neighborhoods you like. Keep an eye out for signs advertising homes for sale or ask a real estate agent for help. Think about what features are most important to you, like the number of bedrooms or location.

• 7. Finalize the Loan

  Before you can buy the property, you'll need to go through some final steps. This includes reviewing all the costs and fees associated with the loan and making sure everything is correct.

• 8. Secure Tenants and Property Management

  Once you've bought the property, you'll need to find people to rent it out. You can either do this yourself or hire a company to handle it for you. Either way, you'll want to make sure the property is well taken care of and that you're following all the rules and regulations for being a landlord.

The Top 3 Benefits of Using VA Loans for Multifamily Homes

• 1. Low to No Down Payment:

  VA loans often require little to no down payment, making them an attractive option for aspiring investors.

• 2. No Burden On Mortgage Insurance Premium:

  With VA loans, you can save money because you don't have to pay for this extra insurance like you would with other types of loans, like FHA or conventional loans.

• 3. Flexible Occupancy Requirements:

  VA loans allow for flexible occupancy arrangements, so you can live in one unit and rent out the others, potentially generating additional income.

Expert Tips to Meet the VA Loan Eligibility

Here, the VA Loan Specialists at KreditSanta are sharing some really helpful tips to make sure you're all set to get your loan approved without any delays.

• Maintain a Healthy Credit Score

  Aim for a score of 620 or higher to boost your chances of getting approved. Keep an eye on your credit report, and consider taking steps to improve your score if needed.

• Keep Debt-to-Income Ratio in Check

  Your debt-to-income (DTI) ratio is a big factor in getting approved for a VA loan. Keep your debts in check so they don't exceed your income.

• Plan Ahead

  Proper planning is essential for a smooth loan application process. Our specialists can help you develop a comprehensive plan tailored to your unique financial situation and homeownership goals.

Start Your VA Loan Application Today

If you believe you can handle the responsibilities of being a homeowner and a landlord, go ahead and apply. This could be one of the best opportunities for you to generate extra income and manage those monthly mortgage payments without breaking the bank.

Plus, you get to choose your neighbors! How cool is that? Talk to a VA loan officer today and begin your journey toward multifamily homeownership.