According to the financial website BankRate.com, the Department of Veterans Affairs offers veterans who qualify a good home loan choice because they require no down payment on the property and no private mortgage insurance is required. Loans from the Department of Veterans Affairs, also called VA loans, are a more affordable option for many veterans who are looking to buy homes, however not every vet qualifies for a VA loan. In addition, not every home qualifies as well.
Owner-Occupied
According to Military.com, VA loans can only be used for homes which will be owner-occupied. This means that the veteran who applies for the VA loan must intend to live in the house the loan will be used for. Therefore, VA loans cannot be used to purchase a property like a business office or a vacation property. Family members may or may not live in the same house, as long as the veteran resides there.
Foreclosed Home
A previously foreclosed-upon come can be purchased with a VA loan. Military.com states that the VA acquires properties that were foreclosed on and then markets them for sale again by placing them on the Multiple Listing Systems (MLS) for Realtors to show their clients. A veteran may obtain a new VA loan to purchase a home at a lower price because it was previously foreclosed on.
Manufactured Home
A manufactured home is a home that is built almost entirely in a factory and then transported on wheels to the lot which the person will live on. According to the VA, manufactured homes, such as a mobile home, can be purchased with VA loans. The only stipulation is that the veteran intends to occupy the manufactured home.
Income Property
Income properties, such as apartment buildings, condominiums and rental units may be purchased with the use of a VA loan, but only if the veteran lives in at least one of the units. For instance, a veteran may buy a duplex with a VA loan, live in one unit and rent out the other. VA loans can only be used on income property up to a maximum of four units. Therefore, a 30-unit apartment complex could not be purchased with a VA loan, according to Military.com.
Building a Home
If a veteran wants to build his own home and use a VA loan to do so, that is allowed. The VA states that a veteran may build his own home by using funds from a VA loan, but because of the many rules involved, it is often difficult for veterans to do so. Another option is to get a home construction loan from a private lender and then refinance it with a VA loan once the building process is complete.
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