Can a VA Loan Be Used for an Investment Property?
Buying investment properties is a great way to diversify your income and provide a much-needed resource to the community. Housing demands are almost always high, but finding ways to finance that investment property can be tough. If you’re a qualified veteran, using VA loans in Colorado Springs seems like a no-brainer. Unfortunately, using a VA loan for an investment property isn’t as simple as you might think. Here’s what you need to know.
VA Loans Are Meant for Primary Residences
The VA loan program exists to help qualified veterans and current military members buy homes without having to provide a down payment or worry about strict credit checks and requirements. Those homes should be your primary residence or the place you and your family spend the majority of your time each year.
You can’t use VA loans in Colorado Springs to pay for vacation homes or investment properties. Instead, you’ll have to use a traditional mortgage loan and must fulfill the lender’s personal requirements to qualify for the loan.
There Are Exceptions
The VA knows that there are different types of houses out there. Some are single-family homes while others get broken up into separate units. You’re allowed to use VA loans to buy a multi-family home as long as you intend to use one of those units as your primary residence.
If you commit to living in one of the units, you’re free to rent out the other units to any tenants you wish. You can then use the rental income you earn each month to offset the cost of your mortgage. Keep in mind that you’ll be responsible for maintaining each unit and you’ll need to take the time to screen each tenant to make sure they’re worth renting to.
Is Becoming a Landlord Right for You?
Ultimately, becoming a landlord means taking on a lot of responsibility. You may be able to outsource the job to a property management company, but you’ll pay for the privilege. If you find yourself constantly busy or don’t want to deal with the inconvenience of living in a building with shared walls, think long and hard before you buy a multi-family home. For many qualified veterans, it’s best to use VA loans in Colorado Springs for private home purchases.
Ready to Apply?
If you’re ready to start looking for a home, get prequalified by applying for VA loans in Colorado Springs online. This will help you identify your budget so you can find the perfect home for your needs.