VA Underwriting Guidelines 

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VA Occupancy Requirement

Primary Residence

The law requires a veteran obtaining a VA guaranteed loan to certify that he or she intends to personally occupy the property as his or her home.  Second homes and investment property are not allowed.  

As of the date of certification, the veteran must either:

  • Personally live in the property as his or her home, or 
  • Intend, upon completion of the loan and acquisition of the dwelling, to personally move into the property and use it as his or her home within a reasonable time. 

The above requirement applies to all types of VA guaranteed loans except Interest Rate Reduction Refinancing Loans (IRRRL's).  For IRRRL's, the veteran need only certify that he or she previously occupied the property as his or her home. 

Example: A veteran living in a home purchased with a VA loan is transferred to a duty station overseas. The veteran rents out the home. He or she may refinance the VA loan with an IRRRL based on previous occupancy of the home. 

Occupancy by Spouse

Occupancy (or intention to occupy) by the spouse satisfies the occupancy requirement for a veteran who is on active duty and cannot personally occupy the dwelling within a reasonable time.  Occupancy by the spouse may also satisfy the requirement if the veteran cannot personally occupy the dwelling within a reasonable time due to distant employment other than military service. 

In these specific cases, consult you Regional Loan Center to determine if this type of occupancy meets VA requirements.  The cost of maintaining separate living arrangements should be considered in underwriting the loan. 

For an IRRRL, a certification that the spouse previously occupied the dwelling as a home will satisfy the requirement. 

No family member or person other than the veterans spouse can satisfy the occupancy requirement for the veteran. 

Definition of a reasonable time

Occupancy within a "reasonable time" means within 60 days after the loan closing.  More than 60 days may be considered reasonable if both of the following conditions are met: 

  • The veteran certifies that he or she will personally occupy the property as his or her home at a specific date after loan closing.
  • There is a particular future event that will make it possible for the veteran to personally occupy the property as his or her home on the specific future date. 

Establishing occupancy at a date beyond 12 months after loan closing generally cannot be considered reasonable by VA. 

Occupancy Requirements for Deployed Active Duty Service Members

Single or married service members, while deployed from their permanent duty station, are considered to be in a temporary duty status and able to provide a valid intent to occupy certification. This is true without regard to whether or not a spouse will be available to occupy the property prior to the veteran's return from deployment.

Occupancy After Retirement

If the veteran states that he or she will retire within 12 months and wants a loan to purchase a home in the retirement location:

  • Verify the veterans eligibility for retirement on the specified date and include a copy of the veterans application for retirement submitted to his or her employer. 
  • Carefully consider the applicants income after retirement.  If retirement income alone is insufficient, obtain firm commitments from an employer that meet the usual stability of income requirements. 

Only retirement on a specific date within 12 months qualifies. Retirement within the next few years or in the near future is not sufficient.

Delayed Occupancy Due to Property Repairs or Improvements

Home improvements or a refinancing loan for extensive changes to the property, which will prevent the veteran from occupying the property while the work is being completed, constitute exceptions to the "reasonable time" requirement.  The veteran must certify that he or she intends to occupy or reoccupy the property as a home upon completion of the substantial improvements or repairs. 

Intermittent Occupancy

The veteran need not maintain a physical presence at the property on a daily basis. However, occupancy "as the veterans home" implies that the home is located within reasonable proximity of the veterans place of employment.

  If the veterans employment requires the veterans absence from home a substantial amount of time, the following 2 conditions must be met:

  • The veteran must have a history of continuous residence in the community 
  • There must be no indication that the veteran has established, intends to establish, or may be required to establish, a principal residence elsewhere. 

Use of the property as a seasonal vacation home does not satisfy the occupancy requirement

Unusual Circumstances

Discuss unusual circumstances of occupancy with the appropriate VA office or submit a description of the circumstances to the VA office for prior approval.

The Occupancy Certification

The veteran certifies occupancy by checking the appropriate occupancy block and signing the occupancy requirements:

VA Form 26-1802a, Addendum to the Uniform Residential Loan Application, at the time of loan application (prior approval loans only) 

VA Form 26-1820, Report and Certification of Loan Disbursement, at the time of loan closing (all loans).  This satisfies the lenders obligation to obtain the veterans occupancy certification. 

The lender may accept the occupancy certification at face value unless there is specific information indicating the veteran will not occupy the property as a home or does not intend to so-occupy within a reasonable time after loan closing. Where doubt exists, the test is whether a reasonable basis exists for concluding that the veteran can and will occupy the property as certified Contact the appropriate VA office if the lender cannot resolve issues involving the veterans intent by applying this test.

 

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