Many Texas veterans assume their VA loan benefit can only be used once. It’s not until you’ve PCS’ed, your home is just a tad too small for your family, or perhaps you’ve realized you’d rather retire in a different state that the big question comes to mind.
Can I get a VA loan if I still own my previous property?
Well, oftentimes the answer to that is yes. You could potentially be approved for up to two VA loans simultaneously (if you have entitlement and meet the criteria of use), so here is what you should know.
Snippet Answer: Can a VA Loan Be Used for a Second Home in Texas?
Yes, eligible Texas veterans can use a VA loan to purchase another home if they intend to occupy it as their primary residence and have sufficient remaining entitlement. In some cases, veterans can have two VA loans at the same time, particularly after a PCS relocation or other qualifying move.
Key Takeaways
- There’s no limit to how many times veterans can get a VA loan.
- Certain borrowers may qualify to have more than one VA loan simultaneously.
- The new property will generally need to be your primary home.
- Available entitlement determines the amount you can receive under a loan.
- A down payment might be required if a veteran’s entitlement is low.
- Relocations due to PCS and other moves may necessitate a second VA loan.
- Second homes for weekend getaways and rental property generally aren’t eligible.
- Know the real estate costs for your region.
Can You Use a VA Loan for These Property Types?
|
Property Type |
VA Loan Eligible? |
|
Primary Residence |
Yes |
|
New Home After PCS Relocation |
Yes |
|
Retirement Home You Will Occupy |
Yes |
|
Home Purchased After Upsizing |
Yes |
|
Duplex, Triplex, or Fourplex (Owner-Occupied) |
Yes |
|
Vacation Home |
No |
|
Investment Property |
No |
|
Seasonal / Weekend Home |
No |
Occupancy is the primary factor that determines whether a second property qualifies for VA financing. VA loans are typically used to purchase your primary home (your residence). And what’s your primary residence? Let’s break it down so you know whether your future purchase could qualify for a VA loan.
What Does the VA Consider a Primary Residence?
A pure investment property isn’t a VA-financed home; you have to be a resident to utilize VA loans. We are about to break down your entitlement remaining and property eligibility. However, to do so, we need to get down to the basics of what qualifies as a primary home.
This appears to cover your principal place of residence, which is “the place where most of your time during the year is spent”. The VA desires that the veteran owner occupy the property shortly after closing.
Typically, this consists of evidence of occupancy, such as:
- Staying in the house as your primary residence.
- Mail is being sent to the house address.
- Voting as a resident of the area at this address.
- File for the house as a property tax home.
- Moving personal property into the house.
Your intent to reside in the house will largely depend on whether your VA loan is approved. Since VA loans are intended to help veterans purchase homes, not investment properties, these rules can apply.
Common Texas Scenarios Where a Second VA Loan Makes Sense
Many Texas veterans use their VA loan benefit more than once over the course of their lives. In fact, due to a variety of life situations,
It’s quite common for Texas veterans to look into moving. And should you have had a chance to cash in your VA loan, you’re most certainly entitled to do it once more for a new house.
Let’s explore a handful of reasons a borrower might seek another VA loan for a second home in Texas.
1. PCS Relocation to Another Texas City
An individual might have orders to another duty station within the service. Veterans who receive PCS orders to another Texas duty station may qualify for a second VA loan while retaining their current property. The service member may need to purchase a new primary residence near the new duty station.
Another military scenario often tackled by the Shirley Mueller team: a family with PCS orders who plan to keep their current Texas house. Depending on the borrower’s remaining entitlement, a second VA loan can be done without selling the first home.
2. Upgrading to a Larger Home
As the family grows, so does its need for space. As families grow, many veterans need additional space, more bedrooms, or access to better school districts. More bedroom space, a playroom, and proximity to the right public schools.
3. Moving Closer to a Military Base
A shorter commute really offers two massive benefits. Firstly, it can profoundly enhance your daily quality of life by reducing your stress levels. The second benefit of a short commute is that it will reduce your personal transportation costs.
4. Keeping the First Home as a Rental
Another popular choice for many veterans after moving is to keep their former home and collect a rental stream.
5. Retirement Relocation Within Texas
There continues to be high demand for Texas as a retirement destination. Many veterans want to move closer to their loved ones, doctors, or desired retirement communities.
VA Loan Occupancy Rules for Second Homes in Texas
Most veterans find occupancy requirements confusing when looking to buy a second property.
Understanding how this rule works can prevent you from common errors that could get your loan rejected.
There’s another one of the many VA home loan eligibility criteria for second VA loans to keep in mind. It might just be one of the most crucial – you need to be intending to live there.
Common Occupancy Situations
|
Situation |
Usually Allowed? |
|
PCS relocation |
Yes |
|
Spouse occupies home |
Yes |
|
Home under construction |
Often |
|
Vacation home |
No |
|
Airbnb investment |
No |
The 60-Day Occupancy Requirement
However, the vast majority of lenders want to see that you are intending to live in the property soon after you take ownership and move in. Typically, people move into the home within about two months after closing.
Exceptions to the Occupancy Rule
Exceptions can be made for occupancy under certain circumstances, such as:
- PCS Orders
- Active duty
- Home construction delay
- Spouse occupancy arrangements
Can You Rent Out Your First VA Home?
Yes. You can totally rent out your first place if you’ve moved. The most important thing to remember is that it must have been purchased and lived in as your main residence. So long as you now have a new home to live in that qualifies under the same VA occupancy requirements.
What Happens If Your Situation Changes?
If you purchased the home with the genuine intention of occupying it as your primary residence, unexpected events such as:
- Military orders
- Job transfers
- Family emergencies
- Medical issues
Typically, do not create occupancy violations.
How VA Loan Entitlement Works for a Second Home in Texas?
Entitlement of Your VA Loan The bedrock of a VA loan is your entitlement. The main answer to “Can I use my VA loan for a second home in Texas?” lies in how much remaining entitlement you have. Knowing your entitlement ahead of time can prevent a VA loan entitlement surprise.
Understanding VA Loan Entitlement
VA entitlement is the percentage of your home that your loan will be guaranteed by the Department of Veterans Affairs of the U.S. Government.
VA entitlement allows lenders to offer you more favorable loan rates on your home loan.
One of the biggest steps in evaluating eligibility for a second VA loan is determining how much entitlement remains. For more than two decades, Shirley Mueller has been assisting veterans in Texas in determining their entitlement and whether a home can still be acquired.
Using Remaining Entitlement on a Second VA Loan
If you still have some entitlement left, you might be able to obtain another VA loan without needing to sell your existing home.
|
Existing VA Loan Balance |
New Purchase Price |
Possible Result |
|
Low |
Moderate |
May qualify with no down payment |
|
High |
High |
A down payment may be required |
|
Paid Off |
Any eligible amount |
Full entitlement available |
Whether you qualify for an additional VA loan largely depends on how much entitlement you have available. If you still have unused entitlement, you might be able to purchase another primary home without selling your existing one. With minimal entitlement, a down payment could be necessary. If you’ve already used all of your entitlement, you might have to have it restored.
Learn more about VA Loan Limits in Texas. Understanding Texas VA loan limits and remaining entitlement is one of the most important steps when determining whether you qualify for a second VA loan.
Example: Using a Second VA Loan after Relocating to Texas
A seasoned soldier buys a house near Fort Cavazos for $275,000 with a VA loan. After a few years, the same family gets new PCS orders to relocate to San Antonio.
Selling and moving: To buy another primary residence, you don’t always have to sell your current home. If you are a vet, you can keep the previous house as a rental and buy a second home with a second VA loan if you’ve still got enough VA entitlement left.
When You May Need a Down Payment?
A required down payment can arise in these instances:
- If available, a guarantee will not be sufficient due to the remaining entitlement amount.
- If the purchase price exceeds the available guarantee.
- To address specific lender coverage concerns.
Restoring Your Full VA Entitlement
A veteran may be entitled to restore a VA loan by:
- Refinancing to a non-VA loan
- Selling the house and paying off the loan
- Applying for restoration of entitlement, if applicable
Can You Have Two VA Loans at the Same Time?
Yes! In certain instances, qualified veterans can maintain two VA home loans simultaneously. This usually occurs if the borrower has remaining VA loan entitlement and will be residing in the new home as their primary residence.
Contrary to popular belief among some borrowers, you generally do not have to sell a previously VA-financed home to be approved for a second VA loan.
Your lender may allow you to own your home while buying another as your primary residence if you have available entitlement.
Texas-Specific Considerations for Second VA Loans
Texas vets need to keep in mind that mortgage qualification is not solely based on purchase price. Homeowner’s Insurance policies, Homeowners Taxes, flood insurance, and Homeowners Association fees will drastically impact mortgage loan amounts!
This is particularly important in areas such as:
- Houston
- Dallas-Fort Worth
- Austin
- Coastal Texas communities
Texas Housing Markets Can Affect Your Second VA Loan Strategy
Compared with many other states, Texas may offer veterans more options in a more varied home sales market. But that can shift based on a home’s value, taxes, insurance, and market interest rates, and where veterans opt to lay roots.
Location drives loan amount. A Dallas-Fort Worth, Austin, or Houston homebuyer will have a much larger loan than a veteran moving to a smaller rural community. Service-connected disabled veterans also need to investigate tax discounts.
Learn more about Texas Disabled Veteran Property Tax Exemptions. These exemptions can significantly reduce long-term ownership costs and improve affordability when purchasing another home in Texas.
Eligibility Requirements for a VA Loan for a Second Home in Texas
Once they’ve screened you, A Certificate of Eligibility confirms your VA loan eligibility, but lenders will still review income, credit, debt, and occupancy requirements. When it comes to financing a second Texas property, private VA loans review your entire financial picture, not just your eligibility.
Besides your income and credit, your ability to get a second VA loan relies greatly on the property you’re buying and whether you’re eligible. Lenders will confirm that the house will be your honest-to-goodness principal residence. Also, you will have enough bonus entitlement remaining.
Most borrowers must:
- Satisfy VA service requirements
- Apply for a COE
- Meet lender credit guidelines
- Verify adequate income
- Maintain your debt-to-income ratio
- Intend to live on the property
- Have adequate remaining entitlement
What Documents Are Required?
You should always read some of this stuff beforehand so that you do not cause a holdup during the underwriting. Virtually all lenders want the same information, though additional documents may be requested.
Typical documents include:
- Certificate of Eligibility
- Government-issued ID
- Pay stubs
- W-2 forms
- Tax returns
- Bank statements
- Mortgage statements
- Retirement income records
- PCS orders when applicable
Property Types Eligible for a VA Loan for a Second Home
Do VA Lenders deny any Property Types?
You might have asked this question – and there are some (but they’re pretty minor!). Before you start your home search, take a look at the property types eligible for the VA home loan benefit:
- Single-Family Homes: By far the most popular type of property a Veteran will find on a VA loan.
- VA-Approved Condominiums: You have to find a VA-approved condominium complex. Search for VA-approved condominiums.
- Multi-Unit Properties: Duplexes, triplexes, and fourplexes. These property types are allowed if you live in one unit.
- Manufactured Homes: Some lenders do work with manufactured home loan types, subject to VA guidelines and the lender’s guidelines.
Before Applying for a VA Loan for a Second Home in Texas
Make sure you can answer all of these before starting. The information below will make the process much smoother and quicker:
- Do I still have entitlement remaining?
- Is the home going to be occupied by my family or me?
- Am I confident that I can pay the loan every month?
- Am I aware of the taxes, insurance, or homeowner fees of my selected property?
- Are my finances and required documentation in order?
- Will my property meet the VA’s needs?
How to Buy a Second Home in Texas Using a VA Loan: Step-by-Step Process
With this guide, you can also ease a few (or most) of the anxieties involved in the purchasing experience. Knowing the details of the buying process when using a VA benefit for your second home can be very helpful.
Review our step-by-step process below for seamless closing:
- Review Available Entitlement: Check how much of your VA loan entitlement remains before looking at homes.
- Obtain Pre-Approval: Speak with a seasoned VA mortgage lender to confirm what loan amount you qualify for.
- Verify Property Occupancy: The VA requires you to live in the new home as your primary residence to secure VA financing for another property.
- Locate an Eligible Home: Find a home that qualifies for VA loan financing.
- VA Appraisal and Underwriting: VA loan underwriting determines the fair market value, condition, and the borrower’s eligibility.
Finalize and Occupy Property: Once the deal has closed, move into the property and designate it as your new primary residence.
By doing so, you can efficiently purchase another home in Texas using your VA loan benefits and maintain VA compliance.
Pros and Cons of Using a VA Loan for a Second Home in Texas
As with other mortgage types, there are advantages and disadvantages to buying a second home with a VA loan. Reviewing them closely will help you determine whether it is the right choice.
Pros
- Potential for no down payment
- Competitive interest rates
- No private mortgage insurance
- Flexible credit requirements
- Ability to reuse VA benefits
Cons
- Occupancy restrictions
- Entitlement limitations
- Funding fee may apply
- Possible down payment requirements
- Vacation homes are not eligible
Common Mistakes Veterans Make When Buying a Second Home
Lots of financing problems and delays can be avoided by a borrower not falling into the simple pitfalls below. Educating yourself will help make your next home search smoother and the financing process much faster.
- VA Home Loans and the Vacation Home: Using a VA loan for a vacation property or investment home can result in loan denial because VA financing requires borrower occupancy. Vacation homes are not typically refinanced for the VA in this state.
- The Confusion of the Occupancy Requirement: There are ongoing, long-debated issues concerning who does or will live in the residence.
- Not Being Aware of VA Remaining Entitlement: The majority of borrowers are convinced they can “afford more.” Let the bank figure out the rest, though.
- Overlooking Texas Real Estate Tax Rate: This is extremely obvious and important for anyone borrowing funds in some parts of Texas today.
- Buying Another House Without Analyzing Your Existing Obligations: Be certain you fully grasp the entirety of your debts before taking on a new payment.
How do you know What You Have Left in Your Entitlement?
Thousands of Texas veterans like you have come to Shirley Mueller (NMLS #336103) to help them with VA loan eligibility, entitlement restoration, and military moves. If you’re looking into a second VA loan, her team can assess what possibilities might be afforded based on what you have with your first VA loan, as well as your residual entitlement.
VA Loans Texas — Serving Those Who Served. Financing the Next Chapter of Homeownership.
Understanding entitlement and occupancy requirements before you apply can help you avoid delays and unexpected costs. It helps them purchase a primary residence without wasting the advantage they earned through their military service.
Moving in Texas for a new mission, to downsize, or to retire close to a base often involves many variables. To make certain that your buying power is not negatively affected, there are 3 main things to determine: What is left of your VA Loan Entitlement? Primary occupancy rules (very important). Is a Texas vet’s second home loan tied to any other rules?
Let the VA Loans Texas team ease your relocation stresses! Let Shirley Mueller, an industry pro, guide you in figuring out exactly what your baseline eligibility is and what entitlements you have left. With upfront approval, we ensure you are fully qualified for the loan products needed for a successful move to your home in Texas.
Let one of the veteran-approved second home lenders in Texas find out what may be possible for you on your Texas veteran second home loan.
FAQs
1. Can I Have Two VA Loans At The Same Time?
Yes, many veterans can use more than one VA loan for different properties at the same time. This usually happens during a move in the military, a career change, a growing family, etc. Hereafter, the veteran keeps his first property as his home and rental property. Your remaining entitlement dictates borrowing capacity.
2. Can I Buy A Vacation Home With A VA Loan?
No. VA home loans are exclusively for your principal residence. Investment properties, vacation homes, and second/seasonal homes are not eligible for VA home loan financing. Your intention to occupy the property as your primary residence must exist at the time of closing.
3. Do I Need A Down Payment For A Second VA Loan?
That is not always true. Several veterans are entitled to a second VA loan with no money down. If you have remaining entitlement, but it does not cover the entire loan amount you need, the VA lender may require a down payment.
4. Can I Keep My Current VA-Financed Home?
Yes. In some cases, veterans have been permitted to continue their existing VA home loan as they buy a second property. Oftentimes, the first property is converted into a rental home upon your relocation. The second property must also meet VA occupancy requirements.
5. Can I Buy A Duplex Or Fourplex With A Second VA Loan?
Absolutely. It’s possible to “house hack” a multifamily dwelling with a VA loan. Here’s a quick run-through: with VA guidance, you can purchase a residential structure with four or fewer units. With a caveat, of course, you’ll need to reside in one of the units to qualify for the property. You can rent out the other dwellings to produce income.
6. Can Surviving Spouses Use A Second VA Loan Benefit?
VA home loan benefits are available to eligible surviving spouses who meet the criteria. The benefits could be applied to a second, Texas primary residence, at the purchaser’s request and when eligible.
7. What Is The Interest Rate Of A Loan For A Second Home In Texas?
The second VA loan doesn’t have a set rate. Your interest rate on a VA home loan is determined not by the government but by the market. The same goes for when you shop around for either a VA refi or a VA second mortgage. If you decide to pursue either of those loan products, your rate will be influenced by the following factors. That said, VA rates are still often lower for veterans than those from traditional lenders.
8. Can PCS Orders Help Me Qualify For A Second VA Loan?
Yes. If you are relocating on military orders, holding two VA loans becomes much simpler. A Permanent Change of Station (PCS) is by far the most straightforward way to get approved for two active VA loans. A PCS order is your ready proof of necessity for a new primary residence, authorizing you to purchase a new house while keeping the old one.
9. Can I Use A VA Loan Again After Paying Off My First VA Loan?
Yes. Many veterans can have their VA entitlement restored once a previous VA loan is paid in full and restoration requirements are met. VA entitlement may be used a second time to buy another primary residence after entitlement restoration.
10. Can I Buy a Retirement Home in Texas With a VA Loan?
Yes. You can purchase a retirement home in Texas with a VA home loan, provided you plan to make it your permanent primary residence. VA property requirements and a lender’s qualification requirements must also be met.
