Veterans Affairs (VA) Loan Occupancy Requirements & Exceptions

A Veterans Affairs (VA) loan can be a great way to buy or build a home for eligible veterans, active-duty service members, and certain surviving spouses. Insured by the VA but provided by private lenders, VA loans come with several unique advantages for homebuyers. However, they also feature requirements you may not find in other loan types.  

One such feature is the VA loan occupancy requirement. This requirement can complicate the decision-making process for VA home buyers, so it’s important to enter your homebuying journey with a clear understanding of it. In this article, we will explain the VA loan occupancy requirement and some potential exceptions you should be aware of.

Primary Residence Requirement

The purpose of the VA loan was to help eligible veterans achieve their dream of homeownership. It was not designed to help borrowers finance investment properties or second homes. That’s why the VA requires that borrowers certify their intent to personally occupy the home as their primary residence by the time of closing or within a reasonable timeframe.  

This requirement applies to all VA loans except for VA Interest Rate Reduction Refinance Loans (IRRRL). VA IRRRL borrowers only need to prove that they occupied the home at one point in time.

Certifying Your Intent to Occupy the Property

Veterans can certify that they intend to meet the occupancy requirements by filling out VA Form 26-1820 at the time of closing. If your lender has doubts about your intent, they should first determine whether there could be a reasonable circumstance indicating that you can and will occupy the home. Should they struggle to reach that conclusion, the VA may have to get involved.

Move-In Deadlines

In general, the reasonable time frame to move into your home after using a VA loan is 60 days after closing. If you can’t occupy the home within 60 days, you may need to prove that you can personally occupy the property at a specific date after closing and explain the circumstances in which it will be possible for you to occupy the home at that date. However, in most cases, if the date is over 12 months away from closing, the VA won’t consider that reasonable.

Exceptions to the VA Occupancy Requirements

Spouse/Child

An eligible veteran could meet the occupancy requirements by having their spouse and/or dependent child occupy the home for them. This would apply specifically for service members who are currently on active duty and cannot move in within a reasonable timeframe.  

The VA also notes that the spouse could potentially meet occupancy requirements if the veteran borrower can’t move in due to non-military employment reasons. However, those must be approved by the VA on a case-by-case basis.  

Also, it’s worth noting that your lender is likely to consider the costs of your separate living arrangements when underwriting the loan.  

Deployed Service

If you are single or married and deployed from your permanent duty station, you may be able to meet the VA occupancy requirements. The VA considers this a temporary duty status and would likely consider the criteria met even if you don’t have a spouse or dependent child who can occupy the home while you’re away.  

Occupancy After Retirement

Eligible veterans who are looking to retire at a specific date within the next 12 months (not “in a couple years” or “sometime soon”) may be able to meet the occupancy requirements, too. If this is you, you’ll need a copy of your retirement application and qualifying post-retirement income, as per your lender.  

Property Repairs or Improvements

Sometimes the home you intend to purchase or renovate requires repairs that will make the home uninhabitable for the 60-day window. If that’s the case, you will need to certify that the home will be your primary residence upon completion of the renovations. Though, it is also important to note that the VA will not guarantee the loan until a property meets their Minimum Property Requirements. So, depending on the repairs or renovations that are needed, the home may ultimately not be approved for purchase. 

Intermittent Occupancy

While you do not need to physically be at the home every single day, it is important that the home be located within a reasonable distance of your job. If your job takes you away from the home for extended periods, you must meet the following conditions: 

• Have a proven, sustained period of residence in the community 

• Have no indication that you have established, plan to establish, or will establish your primary residence elsewhere. 

Unusual Circumstances 

If your situation isn’t described above, the VA may still consider it. Contact a VA representative to discuss your circumstances. They might not be able to accommodate you, but it could potentially be worth checking.

Multi-Unit Housing Rules

Eligible veterans can purchase a multi-unit home with a VA loan as long as they intend to occupy one of the units as their primary residence. If you are hoping to rent out the other units, expect your lender to seek documentation of your experience managing rental units or a plan to bring in a property management company to manage the units.  

Your lender likely will not consider the potential rental income in underwriting unless you can prove you have reasonable likelihood of success as a landlord and have cash reserves worth at least six months of mortgage payments.

Final Thoughts

For eligible veterans, the VA home loan can help you achieve your homeownership dreams. However, despite its advantages, it’s important to acknowledge and understand the restrictions and requirements unique to this loan type. VA loan occupancy requirements reinforce the idea that these loans are meant to get veterans and their families into their primary home. If that aligns with your goals, it might be a good time to talk to a lender about your VA loan options!