When I acquired my first home in Towson, MD in 2012, I used the VA loan to fund the purchase. At the time, I knew about some of the benefits associated with purchasing the house. But, in 2019, I was making a move to Albuquerque, NM and decided to put the Maryland home on the rental market because I had no intention of selling the house.
I started my home purchase on Realtor.Com and came across a home in Albuquerque, NM that was located near the university campus and it was selling for $169,900. I thought it was a great location and decided to pursue the purchase. Since it was my second home, I believed that I was going to have to take out a conventional loan. I called up several financial institutions to get the prequalification letter and it was not until I spoke with a representative at USAA that I was informed that I did not need to get a prequalification letter for a conventional loan. The representative told me that I could pursue a VA loan on the second property.
How was this possible? One of the advantages of the VA loan program is that veterans can purchase a second or third property if they have used some of their loan benefits already. The reason is that the veteran may not have used their loan benefits on their first home purchase. In my case, I had purchased a $175,000 home and still had loan benefits to spare.
How much is the standard VA loan limit? In 2021, the VA loan limit is $548,250 for most U.S. counties. In more expensive housing markets in the continental U.S, VA loan limits can reach up to $822,375.
Judging from the numbers, I easily was able to meet the VA loan limit threshold on my second property acquisition. And if I needed to purchase a third home, it is likely that I would be able to purchase a third home using a VA loan.
What if I wanted to purchase a fourth home? It probably would not be feasible given the numbers to get a fourth home using a VA loan. Unless…I could refinance one of my homes to a conventional loan. That, however, is a matter of creative financing.
After the conversation with the USAA representative, I told him to go on ahead and get me a prequalification letter for a VA loan. Once I received the letter, I was able to make the offer on my Albuquerque home.
As was the case with my Towson home, I paid no money down on the house and I was able to lock in an interest rate at 3.25 percent. At the same time, my funding fee was waived because I had a service-connected disability. There were also no PMI premiums attached to the home purchase. Within 45 days of the offer, I closed on my house in Albuquerque.
If you are thinking about purchasing a home, the best place to get started is on Realtor.com. From there, you can gain information about the house you would like to purchase.