The Law on Occupancy
The law requires a veteran obtaining a VA guaranteed loan to certify that he or she intends to personally occupy the property as his or her home. As of the date of certification, the veteran must either:
- personally live in the property as his or her home, or
- intend, upon completion of the loan and acquisition of the dwelling, to personally move into the property and use it as his or her home within a reasonable time.
The above requirement applies to all types of VA guaranteed loans except Interest Rate Reduction Refinancing Loans (IRRRLs). For IRRRLs, the veteran need only certify that he or she previously occupied the property as his or her home.
Example: A veteran living in a home purchased with a VA loan is transferred to a duty station overseas. The veteran rents out the home. He or she may refinance the VA loan with an IRRRL based on previous occupancy of the home.
When Can a Spouse Satisfy the Occupancy Requirement?
Occupancy (or intention to occupy) by the spouse satisfies the occupancy requirement for a veteran who is on active duty and cannot personally occupy the dwelling within a reasonable time; that is, a veteran assigned to an overseas or other remote duty station.
Occupancy by the spouse may also satisfy the requirement if the veteran cannot personally occupy the dwelling within a reasonable time because of distant employment other than military service.
For an IRRRL, a certification that the spouse previously occupied the dwelling as a home will satisfy the requirement.>br>
No family member or person other than the veteran’s spouse can satisfy the occupancy requirement for the veteran.
What is a “reasonable time”?
Occupancy within a “reasonable time” means within 60 days after the loan closing. More than 60 days may be considered reasonable if both of the following conditions are met:
- the veteran certifies that he or she will personally occupy the property as his or her home at a specific date after loan closing, and
- there is a particular future event that will make it possible for the veteran to personally occupy the property as his or her home on the specific future date.
Occupancy at a date beyond 12 months after loan closing generally cannot be considered reasonable by VA.
Delayed Occupancy Due to Property Repairs or Improvements
Home improvements or a refinancing loan for extensive changes to the property which will prevent the veteran from occupying the property while the work is being completed constitute exceptions to the “reasonable time” requirement.
The veteran must certify that he or she intends to occupy or reoccupy the property as a home upon completion of the substantial improvements or repairs.
The veteran need not maintain a physical presence at the property on a daily basis. However, occupancy “as the veteran’s home” implies that the home is located within reasonable proximity of the veteran’s place of employment. If the veteran’s employment requires the veteran’s absence from home a substantial amount of time, the following 2 conditions must be met:
- the veteran must have a history of continuous residence in the community,
- and there must be no indication that the veteran has established, intends to establish,
- or may be required to establish, a principal residence elsewhere.
Use of the property as a seasonal vacation home does not satisfy the occupancy requirement.
Discuss unusual circumstances of occupancy with the appropriate VA office or submit a description of the circumstances to the VA office for prior approval.