Century 21 Island Life
Robert U. Valenzuela, P.A.
 

Second Home Purchase
Gets Easier For Veterans


But original VA loan must be paid off to qualify

The tremendous the growth of the housing market is being pushed along by the lower-than-expected long-term interest rates and the idea that real estate is a wise investment. In addition, consumers are more reluctant to plow their hard-earned cash into the inconsistent conventional financial markets and now are buying an additional piece of real estate sooner in their lives.

In fact, the second-home market is so huge and important to the United States' economy that the largest survey ever conducted by National Association of Realtors was dedicated to the second-home phenomenon that grew 40 percent in the number of homes sold from 1995-2000. NAR's definition of "second home" now includes single-family dwellings, including condominiums, other than a primary residence. Last year, the purchase of investment property and vacation homes accounted for more than one-third of residential transactions.

Some of these homes will eventually become retirement homes where seniors and aging baby boomers will spend most of their time. Why not purchase it with the help of a VA loan? While federal regulations require that all loans insured by the Department of Veterans' Affairs be used only to acquire a "primary residence," it is possible to purchase a second home using your VA loan guaranty. As in many cases involving the use of real estate, the definition of primary residence is the place you live "most of the year." So, if you use the home more than six months of the year, it can be defined as your primary residence.

"The law was not intended to help people enter the business of real estate and purchase lots of homes," said Chris Michel, a former naval reservist and founder and president of military.com, an Internet site targeting present and former military personnel and their families. "The law was written to help people afford the home that they are going to occupy.

"A VA loan can most definitely help purchase that next home or retirement home. Hopefully in their retirement years, people are spending most of their time in what was their vacation home."

For example, let's say you are getting ready to retire (or can work from a home anywhere) and want to buy a home in Arizona to escape the wetter months of the year in the Puget Sound, Wash., area. However, also you wish to dodge the sizzling desert summers, so the plan to is to use the Arizona home October through April. That seven-month period would constitute the largest block of time you lived in any one place. Therefore, your new home in Arizona would qualify as your primary residence.

The VA requires that you move into the home in a reasonable amount of time and that you keep it as your primary residence. If those are your intentions at the time you apply for the loan, then there is nothing to keep you from using your VA guaranty to purchase a second home or retirement property.

The perception that a VA loan guarantee can only be used once is incorrect. If your original VA loan was paid off, you are eligible to use the guarantee again. If you purchased a previous home with a VA loan and the buyer assumed your loan, your eligibility can be restored only when the assumer has paid off the loan. The only other alternative would be if the assumer were an eligible veteran who was willing to swap his/her available eligibility for yours.

On Jan. 1, 2005, the VA loan guaranty increased to $89,913 and the maximum loan amount was raised to $359,650. The critical requirements for eligibility are an honorable discharge, an eligibility certificate and the ability to make the loan payments. All VA loans have a funding fee for a borrower's first VA loan of 2 percent of the loan. That 2 percent is reduced to 1.2 if the borrower puts more than a 10 percent down payment.

Some seniors and aging boomers still don't know that reservists are eligible for VA programs. After 50 years of offering loans only to vets who served active duty, the VA changed its ways in 1992. Men and women who have completed six years in the Army, Navy, Air Force, Marine Corps or Coast Guard Reserves, or the Army National Guard or Air National Guard, are eligible for VA home loans, including no-down-payment programs.

In addition, reservists who were called up to active duty after August 1990 and served 90 days continuously on active recall are eligible for VA loans and other benefits. This provision was inserted to help the thousands of men and women who were pressed into service during Operation Enduring Freedom and Operation Iraqi Freedom.

"There are a lot more people out there who are eligible for these services now," Michel said. "Many of them don't even know about what might be possible."

Tom Kelly's new book, "The New Reverse Mortgage Formula," (John Wiley & Sons) is now available in local libraries and bookstores. Tom can be reached at news@tomkelly.com.

Copyright Inman News. Used with permission.

What my clients are saying  

We would highly recommend him to anyone buying or selling a house in the Keys. We bought the house as he was the realtor and sold with him. A gem of a person and realtor!

 

~ Henry & Lori Coombs

It was a pleasure to work with Robert. He's extremely knowledgeable about the market and real estate in general. He was very easy to work with and answered all of our questions throughout the process.

 

~ Alex & Brenda Novo-Torano

Robert is excellent.

 

~ Bellina & Orly Toledo

Great job!! Very professional. Robert is great and excellent managing end to end transactions. Always here to help and assist. Once again, awesome job!!

 

~ Jorge & Rita De La Torre

I can never thank you enough for helping me find and negotiate my dream home and for all the advice that goes way over and beyond your responsibilities. You are a professional in every sense of the word. Thank you.

 

~ Daisy Gomez

Robert is an honorable man, a pleasure to do business with. I could not be more pleased.

 

~ Jill Murphy

We have already recommended him. He has history and knowledge of Key Largo that is priceless. Robert provided excellent hands on assistance with everything. Now I'm happy to call him my neighbor.

 

~ Mayte & Rolando Rodriguez

Great real estate agent.

 

~ Juan & Beatriz Colao

It was my first time buying a home. Robert was patient and made it easy. He treated me like family. I recommend him to people all the time!

 

~ Samantha Ellis

Robert was very friendly. We like working with him very much and would use him again. Thanks for all of your help!

 

~ Ray Sharp & Christy Luent

Outstanding service and professionalism received from Robert. He went out of his way to help us. Property sold within one week. He's the best!

 

~ Ileana & Gil Rodriguez

He was wonderful, courteous, and did all he could to sell my home. I have already recommended Robert to my friends and will continue to tell anyone else who is looking for a new home.

 

~ Kevin & Michele Pederson

The realtor is a true professional. Everything was great! He was excellent. I will refer him every chance I get. Very service-oriented.

 

~ Andy & Bertha Fernandez

Robert Valenzuela was very honest, professional, and very courteous with us. On behalf of the Salgado family, we want to thank Mr. Valenzuela for all his patience and kindness. In our opinion, Robert was outstanding with his performance and we will definitely recommend him to our friends and family.

 

~ Carmelo, Rosa, and Maria C Salgado

He's very good at what he does and knows his market.

 

~ Peter & Lourdes Pinto

He was wonderful! So helpful, words do not describe how much he helped us!

 

~ Amy & Stephen Scott

Excellent service! Robert was available anyday at anytime. He was always very friendly and helpful! He was excellent. I know that he will help my friends/relatives and they will be satisfied.

 

~ Daniel & Rosie Pou

He was very kind & helpful. He listened to us and found us the exact house we were looking for. I will recommend Robert to all my friends. It was a very pleasant experience dealing with Robert.

 

~ Didio & Monica Victores

For the last few years we have been buying, selling and building properties here in the Florida Keys. Robert has been part of our success since we started doing business with him. He is very dedicated, knowledgeable, professional, and most of all personable. We have and will continue to recommend Robert to all our friends, family and business partners.

 

~ Rene & Fradys Castillo

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