Using a VA Loan to Buy a Duplex

two-family house photo

Most articles you read about VA loans involve financing a single family home. That’s probably because there are so many single family homes being financed using a VA loan. Yet not many may not be aware the VA home loan program can be used to finance a duplex. There are some definite advantages owning a duplex and financing it with a VA loan compared to other types of homesteads and it is something veterans should explore. You can finance a duplex as long as you occupy one of the units.

Veteran real estate investors often start out buying a two-unit property. When they discover the ease of financing a duplex with a VA loan and the ease of financing future real estate investments they begin to acquire more properties over time. One thing to note here is making sure you’re comfortable living in a home attached to another. You’ll share a wall with your tenant but with a good tenant it might be the best financial move you’ve made so far.

When you hear the term “Let someone else pay your mortgage for you” is a phrase you may have heard and what that really means is the rental income from your property is more than enough to cover the mortgage payment. And because rates are still relatively low and rents are on the rise, not only can the rent cover the mortgage but can also be enough for the annual property taxes, insurance and maintenance costs. If your total monthly mortgage payment for your duplex is $1,500 and the rental income from the other unit is $1,750, you’re mortgage-payment free and pocketing an extra $250 to boot.

The most popular feature with a VA home loan is the absence of any down payment. Not only that, but there is no monthly mortgage insurance payment required. No down payment means less cash of yours at the closing table and no monthly mortgage insurance means your total monthly payment will be lower compared to other low/no down payment mortgage program.

One final note, should you decide to move later on and keep the property as a rental, you can use the rental income from the property to help you qualify for another mortgage to buy your next property. Should you ever refinance the loan on the duplex into a conventional mortgage, you can free up your VA loan eligibility to buy yet another primary residence with zero down.

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If you're ready to get started, or have more questions about buying a duplex with a VA loan, the first step is to find a lender. Our VA Loan Finder will match you with up to five lenders, with competing rate quotes, so you can find the best fit.

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