August 9, 2012
While many eligible veteran borrowers choose the VA home loans program over the FHA loan program, others decide to pursue an FHA mortgage for their own reasons.
In some cases, the borrower picks an FHA guaranteed mortgage over the VA loan program because they don’t have enough VA loan entitlement left to get a full VA guaranty.
In other cases the borrower may simply prefer the FHA loan program for one reason or another. Borrowers who choose the FHA mortgage loan option learn there is a big difference in occupancy requirements.
While VA loan rules state that only the borrower or the spouse of the borrower may live in the home to satisfy the occupancy rule, FHA loans state, “Military personnel are considered occupant-owners, and are eligible for maximum financing if a member of the immediate family will occupy the subject property as his/her principal residence, whether or not the military person is stationed elsewhere.”
That can be an important factor for some military families.
Recent changes to the VA loan program, according to www.veterans.house.gov, do allow a dependent to satisfy the occupancy requirement in limited ways: “…a veteran would be able to count a dependent child, serving in the Armed Forces, to satisfy VA occupancy requirements under the home loan program.”
However, as the FHA loan program loan rules are currently written, FHA mortgages seem to be far more lenient with a borrower’s immediate family members when it comes to satisfying the occupancy rules.
Do you have a question about FHA home loans? Ask us in the comments section.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
Browse by Date: