Have a VA Loan for a House
Can You Have a VA Loan for a House and an FHA Loan for a Different House at the Same Time?
Government-backed loans help borrowers get affordable loans.
The federal government helps make home ownership possible for borrowers who might otherwise be shut out of the mortgage market. The Federal Housing Administration and the Department of Veteran Affairs provide lenders with the reassurance they need to finance borrowers of modest means and credit challenges. FHA insurance and a VA guarantee minimize lender risk by promising to reimburse losses in the event of borrower default. Certain borrowers can have both FHA-insured and VA-guaranteed loans simultaneously.
FHA and VA loans benefit borrowers in important ways. Both loan types allow cash-strapped buyers to buy principal residences; and they limit loan amounts, catering to borrowers with low- to moderate incomes. An FHA loan has a minimal down payment requirement of 3.5 percent. It can be used in conjunction with first-time or low-income buyer programs that assist in paying all, or a portion of, the down payment. VA loans have no minimum down payment requirement. FHA loans are available to borrowers regardless of income bracket or need. VA loans are only available to military veterans and certain family members.
A federally-backed home loan is intended for use by a borrower who occupies the house as a primary residence. FHA and VA prohibit investors from using the loans to acquire income properties. A veteran, or qualified family member such as the unmarried widow of a deceased veteran, can obtain one loan type initially, and the other loan type on a different property, in the future, without having to pay off the prior loan. In such a case, the veteran would have both loans at the same time.
A principal residence is defined as a home in which the borrower intends to reside for a majority of the calendar year. A veteran cannot obtain a VA and FHA loan at the same time with the intention to live in both as an owner-occupant. Lenders typically include an affidavit or certification in their loan documents that the borrower must sign, verifying that the home will be owner-occupied. A veteran who intentionally deceives the lender and federal government by obtaining the loans under false pretenses risks having to repay the loans immediately, foreclosure by the lender and possibly federal criminal charges.
A veteran can obtain a FHA loan before or after obtaining a VA loan, by signing as a non-occupant co-borrower or co-signer on the FHA loan. This involves taking responsibility for the FHA loan's repayment without actually living in the home. A co-borrower co-owns the home, whereas a co-signer simply acts as a guarantor without ownership rights. A veteran might do this to help a family member with insufficient income buy a home.