December 2, 2022

The US military is the most powerful force on Earth. It’s currently comprised of less than one-half of 1% of the nation’s population. That’s just over one million Americans serving active duty, not including the Coast Guard.

Many of these servicemen and women who successfully complete their service terms will qualify for one of the best mortgage loans on the planet: the VA loan.

VA loans are just one way that the nation expresses its appreciation towards those who serve our country. But many savvy military members wonder if they can use a VA loan for investment property opportunities.

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The answer is no, but sometimes yes. There are ways that you can do it. And since VA loans allow you to buy a house for 0% down, it’s one of the best ways to jumpstart your investing career.

Keep reading below to learn more about using VA loan for investment property. 

VA Loan Requirements

The first thing you need to understand is how to qualify for a VA loan. Not all those who are currently serving in the military qualify.

You’ll need to get a Certificate of Eligibility (COE) before you can apply for a VA loan with a mortgage lender. Requirements for VA loans differ for those serving active duty, serving in the Coast Guard, and those who are Reserve members. 

For those serving active duty now (or will be in the near future), you must serve for 90 continuous days. If you were discharged from service, there are still a few exceptions that would allow you to qualify.

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In any case, your first step is to request your COE from the eBenefits portal.

How to Use VA Loan for Investment Property

The biggest benefit of VA-backed mortgage loans is that you can finance a property for 0% down. So you’ll need very little cash to buy a house.

However, one of the main requirements for VA loans is that they must be used for a primary residence. So, is it possible to use VA loans for investment properties?

If you’re flexible, then yes. You can use a VA loan to buy a duplex, triplex, or even a quadplex. As long as you live in one unit of the property, you can buy it for 0% down and rent out the other units.

Your VA lender will verify that you intend to live at the property for at least 12 months.

So with a VA loan, you can get between one and three rental units as long as you’re willing to live on-site for one year. After that, you can move out, turning the entire property into a group of rentals. 

While this may seem inconvenient for some, it’s one of the best VA loan loopholes available. And there are instances when you can use a second VA loan for rental property opportunities. You might be able to have two VA loans out at once.

Otherwise, you can refinance your original property into a traditional mortgage and get a VA loan on the new property. If you want to ensure you do it right, then check out more resources here. 

Jumpstart Your Real Estate Investing Career

So, can you use a VA loan for investment property opportunities? Yes, with some limitations.

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You can use it to finance a small multi-family property if you intend to live there for a year. By using this strategy, you can take a major shortcut to obtain multiple rental units early in your investing career.

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