The VA loan is one of the most powerful tools available to veterans and active-duty service members to buy homes with no money down and no mortgage insurance.
But did you know you can use your VA loan benefits (read the buyers guide here) to build wealth, including the ability to have more than one VA loan, purchase multi-family investment properties, and long term rental properties?
Yep, it’s true, but implementing these strategies requires some creativity and planning.
Here are 10 savvy strategies to leverage your VA home loan benefits to enhance your financial future and build generational wealth.
Table of Contents
#1. Multiple VA Loans and No VA Loan Limit
Did you know you can have multiple VA loans? Yep, it’s true. Qualified veterans can hold more than one VA loan at a time, which allows for the ownership of multiple properties. Also, the removal of VA loan limits for veterans with full entitlement expands purchasing power without being constrained by previous county loan limits. This can facilitate the acquisition of higher-value properties or homes in more expensive markets.
#2. No Down Payment Requirement and No Mortgage Insurance
The VA loan’s no down payment requirement significantly lowers the barrier to homeownership, which is often the initial step in building personal wealth. Furthermore, the absence of a requirement for mortgage insurance reduces monthly costs, compared to other types of loans, which enhances affordability and can free up income for other investments or savings.
#3. VA Loan Multi-Family Investment Properties
Using a VA loan to purchase a multi-unit property (up to four units), with the stipulation of occupying one of the units, allows veterans to generate rental income from the additional units. This income can cover the mortgage and operational costs of the property, potentially generating positive cash flow which contributes to wealth accumulation.
#4. VA Loan Long-Term Rental Properties
Upon moving out of a VA-financed home, the property can be rented out. This strategy allows veterans to retain properties and build a portfolio of rental units, leading to continuous income streams, an essential component of wealth building.
#5. Purchase Land With a VA Loan
While you can’t buy a piece of land with your VA loan and sit on it, you can use your VA loan to buy land if you also have plans to build on the property right away. You’ll need to submit formal construction plans and, upon completion, have the finished property inspected.
#6. VA Renovation Loans
VA renovation loans enable veterans to finance both the purchase of a home and the costs of necessary renovations into one loan. This can make fixer-uppers more accessible and affordable, potentially increasing the value of the property significantly after renovations.
#7. Buying a Farm Residence
While the VA loan cannot be used for purchasing income-generating farms, it can be utilized to buy a residence on a farm. This option allows veterans to enjoy rural living without the financial burden of a large down payment and high-interest commercial loans.
#8. Energy Efficient Mortgages (EEMs)
Adding the cost of energy efficiency improvements to a VA loan can increase the initial loan amount but save on utility costs in the long run. This not only helps in managing ongoing expenses but also increases the value and marketability of the home.
#9. Refinance with Your VA Loan
Refinancing options like the VA Streamline Refinance (IRRRL) or VA Cash-Out refinance can lower interest rates, reduce monthly payments, or provide cash from home equity to be used for other investments, debt consolidation, or large expenses.
#10. Assumable VA Loans
Yes, VA loans are assumable. Assumability of VA loans can be an attractive feature in a rising interest rate environment, making a property more appealing to potential buyers who can take over a lower interest rate than currently available in the market.
Conclusion & Wrap-Up
In conclusion, VA loans offer a unique and potent set of benefits that extend far beyond the basic advantage of purchasing a home without a down payment.
The little-known strategies outlined in this article—ranging from owning multiple properties, investing in multi-family units, utilizing renovation loans, and leveraging refinancing options—illustrate how veterans can significantly enhance their financial stability and build generational wealth through the VA loan program.
Ready to Unlock the Power of Your VA Loan Benefits? WE CAN HELP!
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If you want to buy or refinance your home for less, to include creative ways to use your VA loan benefits, you can get in touch with us HERE.
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About the Author
Brian Reese is a senior advisor and co-owner at District Lending. He is one of the world’s leading experts in veteran benefits, having helped millions of veterans secure their financial future since 2013. Brian is the founder VA Claims Insider, an education-based Coaching & Consulting company whose mission is to educate and empower veterans to get the VA disability benefits they’ve earned for their honorable service. A former active-duty air force officer, Brian deployed to Afghanistan in support of Operation Enduring Freedom. He is a distinguished graduate of management of the United States Air Force Academy and earned his MBA as a National Honor Scholar from the Spears School of Business at Oklahoma State University.
In Brian’s Words:
“As a military veteran, I’ve made it my life’s mission to help people live happier and wealthier lives. District Lending brings this mission to life. We believe in integrity, honesty, and transparency, which is why you’ll see our rates right on our website. You’ll find lower rates and zero lending fees, which means you can buy your dream home for less. The savings are passed on to you — the way it should be.”
– Brian Reese, Advisor and Co-Owner, District Lending
