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Buying a MultiFamily Property
Many veterans have taken advantage of the VA Home Loan Program to buy their own home, but what if you want to use the program to purchase investment properties? There are ways you can use the VA Home Loan Program to invest in multifamily properties but they have specific guidelines.
A multifamily property is any home or residential building that has more than one unit. Most people purchase multifamily housing in order to invest in the property and use the rent from the tenants to pay the mortgage. This way the owner will get the mortgage paid for free and will eventually be able to sell the property and make money. It sounds great, but there are some things to remember: - You have to qualify for a multifamily housing loan.
- You may have periods of time when units are empty and you have to compensate out of your own income to make up for the missed rent and pay the mortgage.
- You have to keep the properties in good working condition and meet code requirements for rental units depending on the state you are in.
- If there is a major plumbing, roofing, pest, or any other problem you have to pay to fix it.
Even with all of these possible deterrents and set backs many people make good money in multifamily housing investments. When you plan to use a VA Home Loan to acquire the multifamily property there are some things you should know:
- You can get up to 15 loans from the VA for multifamily housing properties with a maximum loan amount of $100 million.
- The VA offers to guarantee loans for multifamily housing because they stipulate that you have to rent to veterans and offer housing assistance to homeless veterans through the section 8 program of The Department of Housing and Urban Development (HUD). This means the government pays the rent for the homeless veterans, so you still get your money.
- These loans can be used for renovating existing properties, building new properties, buying furniture, equipment, supplies, materials, land, and also to refinance current loans.
Acquiring multifamily housing through the VA Home Loan Program is a great way to invest money with fewer concerns. Because the VA requires you to rent to veterans and take section 8, you know you will always get your rent from the government and there will always be veterans who need housing or transitional housing. Read more about the Loan Guarantee Program for Multifamily Housing here
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