VA loans are one of the best options to consider if you are looking for a home-buying solution. VA loans are ideal loan programs with their benefits, and anyone eligible should not pass up on the offer.
If you were able to use a VA benefit in purchasing your first home, you might begin to think about whether it’s possible to use your eligibility in buying a second home. Keep on reading to find out more about VA home loans.
Is a VA Loan Usable after a Short Sale or Foreclosure?
The main difference with a VA loan is that it is made specifically for members of the U.S. military, veterans, and their families. Despite this, the VA is still cautious about giving out loans to people who have a tarnished credit history.
If you were previously a victim of a short sale or foreclosure in the past, you need to address how this event will affect your second VA loan application.
A foreclosure will definitely disqualify you from getting a second VA loan if it happened within a certain period. The VA has set a rule for this purpose: a foreclosure within the past two years will make you ineligible for a second VA loan.
If your foreclosure happened more than two years ago, your situation might be different. You might be able to get a second VA loan. The VA sets a time frame for their eligibility requirements regarding foreclosures. However, you must be able to prove that you have reestablished good credit.
Does a VA Loan Allow Bonus Entitlement after a Foreclosure or Short Sale?
The VA offers the Bonus Entitlement Program, allowing eligible VA loan applicants to receive a bonus or extra funding when they purchase a home. This bonus is intended to help veterans buy houses with favorable terms.
You may think that you will not get the bonus since you were previously a victim of a short sale or foreclosure. Fortunately, your situation is not totally hopeless. The VA is willing to hear your case and consider offering the bonus to you. Just be prepared to explain your situation to the VA.
In most cases, the VA is open to granting a bonus after a foreclosure or short sale. However, the minimum loan amount is set at $144,000. The amount of money you will be eligible for will depend on the remaining eligibility, buyer’s debt-to-income ratio, credit scores, and more.
Is a VA Loan Usable for Purchasing a Vacation Home?
A vacation home does not fall under the category of a primary home. No specific rule prohibits you from purchasing a vacation home with a VA loan.
However, if you plan to use a VA loan to purchase a vacation home, the VA may require you to provide proof that it is your primary residence.
For example, you may be required to show proof that you are a resident of the area where you want to purchase the home. The VA will require you to provide certain documents as proof, like copies of your driver’s license and voter’s registration.
Is a VA Loan Usable for a New Primary Home?
Yes, VA loans can be used to purchase a new primary home.
You will be required to submit many documents and information to the VA to prove that the property you are purchasing is actually your primary residence and not just a vacation home.
In addition, a VA appraisal is also required in this case. This appraisal is needed to ensure that you are buying a primary residence and not a second home.
Final Thoughts
VA loans are one of the best options if you plan to make a home purchase. They offer many benefits such as zero money down, high eligibility, and more. However, VA loans are primarily designed only to help you secure your primary residence.
If you are looking for the best home loans in Sacramento, CA, work with us at Hawkins Home Loans. Our team of local mortgage lenders can help you have a stress-free process through our amazing services and incredible rates. Schedule an appointment to start your home buying journey.
