A Permanent Change of Station (PCS) from one base to another can create the opportunity for VA borrowers, under the right circumstances, to rent out their vacated VA loan homes and get VA loans in their new military towns.
“PCS'ing” is military speak for moving, and it can happen on the spur-of-the-moment for many active duty servicemembers. Homeowners often have to pack up and get out quickly. A fast solution for what to do with that empty VA loan house is often in order.
Renting out your home financed with a VA loan is an option. If done by the book, the rental income can be used to offset the existing VA mortgage payment. As a rule, VA loans are not used to purchase income property due to the owner-occupancy rule. But, once you’ve lived in the home, it is okay to vacate and rent out the home. PCS is a fine reason to exercise this right.
Additionally, it’s possible to have two VA loans at once as long as the homeowner has enough entitlement, qualifies with income and credit and meets the VA requirements for subsequent use of home loan benefits.
If you’re planning on renting out your vacated house and getting a second VA loan, there are a few conditions you should know about:
- It’s okay to have two VA loans at a time as long as certain conditions are met
- Rental income offsets the existing mortgage debt, for purposes ofyour new loan analysis
- A copy of the lease agreement is needed
- Monthly rental income should be more than the monthly mortgage payment
Working with experienced real estate and mortgage professionals who understand the VA loan process can help make the transition during PCS season a smooth one. For more information about PCS and VA loans, contact a loan officer experienced with VA loans.