A VA loan is a type of mortgage loan that’s available thanks to a program that was established by the U.S. Department of Veterans Affairs.
This loan basically helps veterans, and their surviving spouses, to own homes, but how does it work?
Can property investors benefit from it, such as in the case of flipping houses? Here’s everything you need to know.
Can you flip a home with a VA loan?
It can be possible to flip a house that was initially purchased with a VA loan, as long as it’s now foreclosed.
This is because there are strict rules when it comes to VA loans that don’t make them viable for flipping houses.
That doesn’t mean that you can’t benefit from some VA properties.
With that in mind, let’s take a closer look at VA loans and what they’re all about, as well as how va property flipping can work for house-flipping enthusiasts.
Contents
How Do VA Loans Work?

VA loans were established with the aim of helping veterans and their surviving spouses purchase property in which to live.
These loans give up to 100 percent financing on the value of a home, as reported by Investopedia. They have other impressive benefits, too. These include:
There’s no down payment required on the house unless the specific lender deems it a must.
There is no private mortgage insurance premium that’s required.
The closing costs are limited and might even be paid by the seller.
There are even property tax reductions available, but this depends on the state in which the person resides.
VA Loans For Fix And Flips – Can They Work?

Now for some bad news, house flippers.
While the above benefits of VA loans sound really great and you’re probably itching to make use of them, these loans can’t be used to buy investment property, as Military VA Loan reports.
The main reason for this is because you have to be an owner-occupant of the home you purchase.
Once you’ve purchased the house, you have to live in it.
The rules state that occupancy must be made within 60 days of the mortgage closing and you have to prove that your house is your primary residence, as outlined on Military VA Loan.
While there is no specified amount of time in which you must live in the home, if you still have a VA loan on the house then you have to be living in it.
In addition, you have to meet requirements in order to be eligible for a VA loan. As reported by VA Loans, these include:
- You have to have served a minimum of 90 days on active military duty during wartime;
- You need to have served a minimum of 181 days on active military duty during peacetime;
- You must have served for at least six years as a National Guard or Reserves member;
- You have to have been married to someone who served in the military.
How Flipping VA Property Can Still Work For You

All of the above don’t mean you can’t sell the house you’ve bought with a VA loan at a later stage, or even flip and fix it to sell.
You might be wondering, “How on earth could I flip a house if I have to make it my primary residence?”
Well, perhaps this type of loan could be suitable for you in the following cases (as long as you are a veteran or veteran’s spouse):
1. You need a primary residence in which to stay but you want to flip it at a later stage and make a profit from the sale.
2. You want to take your time to house flip. You’re not looking to fix and flip numerous homes, but maybe just one or two, and over a longer period of time.
3. You might want to use your primary residence as a way to gain experience with renovating and selling a home to make a profit, but you’re not going to be flipping this house quickly. It’s more of a learning curve, but it can still give you a profit at a later stage – just maybe not as quickly as the six-month average that comes with house flipping.
What House Flippers Need To Know About VA Foreclosures

Now, what happens if you want to start house flipping regularly?
While you obviously won’t be able to use a VA loan for this real estate goal of yours, there is another option available to you –and you don’t have to be a veteran in order to benefit from it.
We’re talking foreclosures!
When a veteran who bought a VA property fails to pay their mortgage, the home will be foreclosed and sold to the public.
Anyone can buy a VA home that’s been foreclosed, whether or not they are veterans or the spouse of a veteran.
These VA property listings can be found on the Ocwen website, and once you’ve found a property you’re interested in purchasing, you just have to contact a real estate professional who can organize a viewing of the property and help you with the purchasing process.
One of the great things about buying a foreclosed home is that you’ll probably get a great deal on a property.
In addition, you can get any financing you want if you require it, even though it was a VA property, as Pocket Sense reports. This definitely does open up your options.
What About The Vendee Loan Program?

What happens if you need financing on a foreclosed VA property?
While there are many types of financing options available to you, one that’s worth exploring is the Vendee Loan Program.
This is available to veterans and non-veterans alike, as well as owner-occupants or investors, as stated on the VA website.
Yes, you read that right – property investors can make use of this loan!
The Vendee loan has no mortgage insurance requirements and your credit score is not an important factor when applying for it.
This makes it a valuable loan to explore if you have bad credit that prevents you from taking out traditional loans.
There’s no limit to the amount of properties you can buy. In addition, sellers tend to cover up to 6 percent of the closing costs, as The Nest reports, but these closing costs do tend to be a bit higher than those of other properties.
There are a few things to bear in mind, though.
With a Vendee loan, you’re essentially buying a house “as is,” and you need to take that into consideration before taking the plunge and purchasing it – even if it has a great price on it.
Make sure you research houses in the neighborhood to find comparable prices so that you don’t spend too much money on a property that requires a lot of work to fix and zaps your profits in the process.
Related Questions
What Should You Look Out For When Purchasing A Foreclosed Home?

It’s important that you get the home inspected.
This will give you valuable information about the structure of the home and let you know if there are major problems with it.
You should make a list of all the repairs required so that you don’t purchase a property that won’t be profitable to flip.
Where Can You Find VA Properties?
If you’re a veteran, you can log onto the VRM website where you’ll be able to view properties in different states and according to your specifications, such as when it comes to price.
Do You Need Good Credit To Get Approval For A VA Loan?
Your credit score will matter when applying for a VA loan. Most lenders will want borrowers to have a credit score of 620 or higher. In addition, you need to show the lender that you have enough money to pay back the loan.
Bottom Line

There are many things to consider when it comes to va property flipping.
For starters, if you’re interested in purchasing a home with the use of a VA loan, you’ll have to be a veteran or the spouse of a retired veteran.
In addition, you can’t use this house as a flip – it’s non-negotiable that you live in it as your main residence.
On the other hand, if you’re purchasing a VA home that’s been foreclosed, you can choose your own financing for it and flip it – perhaps even increasing your profits because of its low price.
In this way, you can make the most of foreclosed VA homes when flipping, so they’re worth checking out.