Buying a Duplex with a VA Loan

If you’re a veteran, active-duty service member, or surviving spouse, you may be eligible for a VA home loan to purchase a duplex. Depending on your level of eligibility, the U.S. Department of Veterans Affairs can insure one-quarter of your full loan amount or one-quarter of your county’s VA loan limit. Typically, counties in Virginia and North Carolina have a two-unit home loan limit of $828,700. Some northern Virginia locales even top out at $1,243,050.

As a result of the VA’s partial insurance of your loan, lenders like OVM Financial can provide you with an array of helpful benefits:

• Seller-paid closing costs and concessions
• Competitive interest rates
• Zero down payment for full entitlement customers
• No monthly mortgage insurance requirements

To help you out, we’ve collected some information you’ll need if you’re buying a duplex with a VA loan.

Obtaining a Certificate of Eligibility

To find out if you qualify for a VA home loan, you’ll need to apply for a Certificate of Eligibility (COE) through the VA. Your loan officer can also take care of this step for you.

This document establishes your fulfillment designation, or pre-approved VA loan amount guarantee. A COE also proves your VA home loan eligibility to your mortgage lender.

In addition to meeting VA loan requirements and procuring your COE, you must also provide personal financial information to your lender for review.

• Credit score and history
• Debt-to-income ratio
• Current and previous employment
• Current assets, including savings, retirement, and investment accounts

While the VA doesn’t require a minimum credit score, your lender may have different criteria.

Understanding full versus remaining entitlement

Keep in mind, your loan officer will be available to apply for your COE, and we will help explain the status of your entitlement once we have this document. If you’d like to learn more about how we determine full versus remaining entitlement, continue on below.

When you apply to buy a duplex with a VA loan, the VA can approve you for full or remaining entitlement. To qualify for full entitlement, you must meet the following requirements:

• You haven’t previously used your VA home loan benefits.
• You’ve paid back any previous VA home loans.
• You completely repaid a VA loan following a foreclosure or short sale.

If the VA awards you full entitlement, you’ll enjoy no VA home loan limits and no down payment obligations for loans over $144,000.

If you’ve already used some of your VA loan benefits and have remaining entitlement, or remaining funds from a previous VA home loan, there are a few restrictions to keep in mind:

• The VA will insure your loan up to 25% of your county’s loan limit minus the amount of entitlement you previously used. This means if you default on your loan, the VA will reimburse your lender for that 25%.
• Your lender may require a down payment if your loan totals over $144,000 since most lenders require your entitlement, down payment, or a combination of the two to cover at least 25% of your total loan amount regardless of the VA’s insurance.

In addition to buying a duplex with a VA loan, you can also purchase larger multi-family properties that include up to four units. Reach out to an OVM Financial expert, so we can answer any questions you may have. You can also start your online application today, or check out other helpful articles about multi-family VA loans and how a child of a veteran can get a VA loan.