Can You Use VA Loan for a Rental Property?

As property managers that deal closely with real estate investors and property landlords, one of the most common questions we get asked at First Class Property Solution is about funding methods that can be used when buying rental homes. In our experience with property management in Midwest City, for example, clients frequently wonder about options such as VA loans. Among these is whether or not a VA loan can be used for purchasing an investment property. Unfortunately, this is one of these questions that has a complicated answer, and we’ll get into that below.

To be able to take informed actions on your real estate investment plan, it is essential that you comprehend the complexities revolving around VA loan eligibility and requirement criteria. Let us uncover its possibilities and restrictions.

What are VA Loans?

VA loans are mortgage benefits that eligible veterans, active military, and certain surviving spouses can take advantage of. These loans are secured by the Department of Veterans Affairs and come with numerous benefits, such as no down payment, no private mortgage insurance, and low-interest rates.

The initiative was aimed at helping veterans attain homeownership, and this has made it easier for people who have protected our country to buy homes for themselves and their families.

VA Loan Qualifications Criteria

To be eligible for issuance of a VA loan, one has to satisfy certain service criteria and obtain a Certificate of Eligibility from the VA. Both active duty personnel, eligible veterans, members of the National Guard, and reservists have eligibility depending on certain conditions.

Excluding the obligations for military service, all borrowers have to meet typical loan guidelines, such as having adequate income, decent credit, and debt expense ratios that meet loaning guidelines.

Primary Residence Requirement

Now, this is where it can get complicated for investors. There is a strict occupancy requirement on a VA loan that requires the property be used as a primary residence. If you have ever asked, ‘can I use a VA loan for rental property?’, it's important to know you are obligated to occupy that home within 60 days of closing and then occupy it for a minimum of one year.

This is because VA loans are meant for helping veterans obtain a dwelling of their own, and not for investing in any kind of real estate venture. The VA is very serious about this and has stiff repercussions for any violations.

Rental Property

Although you cannot finance a rental property through a VA loan, below are some valid scenarios for which a house purchased through a VA loan could become a rental property down the road:

Job Transfer:

 If you have to relocate based on military or job orders after having resided within it for the required period, you may be able to rent that house and buy a primary residence elsewhere.

Multi-Unit Properties: 

Can you use a VA loan for rental property? You should know that you can avail a VA loan for purchasing a property that has up to four units, as long as you occupy one of them as your primary residence. You can rent other units, and this will help you repay your loan.

Future Rental Conversion:

 You can convert your original, VA-funded property into a rental property after satisfying loan occupancy and purchasing a new primary residence. Many investors explore using a VA loan for rental property in this way.

Important Considerations

It is always recommended that our clients exercise caution before pursuing these methods. Also, non-compliance with occupancy guidelines is monitored by the VA, and any misuse of one’s benefits can lead one to be required to pay the loan amount upfront, through loan acceleration.

Moreover, exercising your loan benefit on one house may result in you losing that privilege again, based on your available entitlement. Some military personnel can avail this benefit more than once, based on different considerations concerning loan values and available entitlement.

Making Informed Investment Decisions



Although VA loans present outstanding advantages for purchasing primary residences, they are not considered the most optimal option for accumulating a rental property portfolio. Consequently, we generally advise our investor clients to consider conventional investment property loans, portfolio loan products, or alternative loan offerings intended for rental property purchases.

Although these alternatives involve larger down payments and potentially high-interest fees, they provide flexibility that serious real estate investors need and lack any restrictions that may be present in VA loan applications.

If you are a veteran who is interested in investing in real estate, you could consider taking advantage of your VA benefit for purchasing a primary residence that may one day become a rental property, and then pursue other means of funding when acquiring investment properties!