us Work with veterans and active members every day to help them realize their dream of home ownership. VA loans offer incredible benefits, but there are some specific rules you need to know, especially if you plan to use rental income to qualify.
Piti reserves require rental income
VA requires 6 months of PITI reserve when a VA borrower purchases 2-4 units of property and plans to use rental income from other units to qualify.
- piti = principal, interest, taxes and insurance
- Without these reserves, rental income will not be used for eligibility.
If the borrower wants to use rental income from the investment property they already own, the VA will need 3 months of Piti reserve for the property, or again require rental income.
Not allowed fair gifts
Another important rule: VA does not allow fair trade gifts. This means that the purchase price cannot be reduced by replacing cash payments by the seller’s credit. The borrower must meet the requirements of the VA without such assistance.
Our VA loan experts guide you through the entire process, so you are always the first step. We will help you calculate your reserves, build loans, and ensure your financing complies with VA’s guidelines.
Connect with us and we will have one of the VA loan experts to guide you in the right direction.
