Buying a Owner-Occupied 2-4 Unit Property With a VA Loan

A nice feature of a VA Loan is that you can purchase an owner-occupied 2-4 unit property and get 100% financing.  Yes you could potentially buy a 4 unit property, live in 1 unit and rent the others and get 100% financing.  There is one major catch though; you have to have prior landlord experience to use the income from the other units towards qualification.  If you do not have prior landlord experience (either as a property manager or owning rental units yourself) you can still purchase a 2-4 units property with 100% VA financing, but you would have to qualify without counting the rental income.

If you do have prior landlording experience, VA will allow you to count 75% of the market rents for the other units that will not occupy.  So if you were to purchase a 4 unit property where the 3 units you would not occupy were each getting $1,000/mo in rent, you could count $2,250 in rental income towards your income to qualify.  This can be very significant in helping your qualifying for a larger loan amount.

I think buying an owner-occupied 2-4 unit is a terrific way to get started buying real estate.   Many times after collecting rent, your housing payment on a 2-4 property will be less than if you purchased a condo or single-family home.  Additionally, after a few years with rent rising with inflation, the other units could eventually pay for the entire housing payment of the 2-4 unit property, allowing you to essentially live for free.  And finally, in a few years you may want to move on to live in a single-family house and you could retain the 2-4 unit as an investment that could provide cash flow to you for life.

If you have any questions about getting approved for a VA Loan feel free to call me at 858-922-7899 or email me at .

Warm Regards,

Rob Chomentowski

Sr. Loan Officer (and VA specialist)