Purchasing a home in a new state can be a complex process that requires careful consideration. Service members and Veterans may want to use their VA benefits but wonder if it’s even possible to get a VA loan in a new state.
Can a VA loan be used in another state?
Yes, it is possible to use your VA home loan and buy a house in a different state. You must still follow VA occupancy requirements by living in the home as your primary residence and moving into the home within 60 days of closing.
VA Loan Exceptions for Moving to Another State
While VA occupancy requirements are typically heavily enforced, there are a few expectations.
Active-duty service members with a spouse or dependent may allow the spouse and/or dependent to occupy the home while they are serving.
Service members deployed from their permanent duty station are considered to be in temporary duty status and can satisfy the requirement through intent to occupy. In this case, there is no need for a spouse or other acceptable party to satisfy occupancy.
If the home is undergoing improvements or renovations, this may also affect occupancy by possibly requiring you to wait until the construction is over and it’s safe to inhabit.
It’s best to talk to a VA lender about your specific situation when using a VA loan in a new state to fully explore your options.
Establishing Employment
Civilians and service members alike don't always have the luxury of determining exactly which city and state they'll be living in. It's often a job that determines much of that for them.
If you're a civilian, chances are you have more freedom to search for work only in locations you like. However, depending on your chosen career field and the job market at the time, potential opportunities may be limited. That could mean accepting a job wherever you can find one – even if it's halfway across the country.
If you're still in the military and relocating to PCS, you'll typically have an even narrower area to choose from.
Either way, a big factor when applying for a VA loan while moving to another state is securing employment. A lender will view you as a significant risk if you do not have stable and reliable income to pay for your future mortgage. Once you've established new employment, you can narrow in on a location, and your next step will be to select a lender.
» CALCULATE: Calculate your VA Loan savings
How to Buy a Home in a New State with a VA Loan
Using your VA home loan benefit in a new state is no easy task. There may be several obstacles, so it’s in your best interest to create a plan. Below, we break down the process and include some tips to ease your transition.
1. Choose a Lender
Whether it was by choice or by chance, changing jobs prior to obtaining financing is perceived as risky. The mortgage lender you select will want to see a job offer letter or new employment contract to ensure you won't experience a gap in employment or significant loss of income, which could affect your ability to afford a mortgage.
That also means your new job should be in the same line of work as your old job, according to Samantha Reeves, senior mortgage and homebuying writer.
"Say a contractor moves to a new city and opens up a cupcake business, but the contractor doesn't have any experience making or selling cupcakes. The perceived risk is high. That's why a lender is going to want to see at least two years of experience for any new job."
Selecting a lender is an important part of your homebuying journey. Reading about other borrower's experiences can reveal a lot about each lender.
2. Find a Real Estate Agent
If you aren't yet familiar with the area you're about to move to, it may be best to enlist the help of a professional to find your new home. Ask your lender to recommend a real estate agent – one who has been through an out-of-state sale before, if possible.
You can also look online for reviews and recommendations. Either way, it's important to find a real estate agent who both knows the area and understands your needs.
If you haven't already, you'll also need to list your current home with a real estate agent in your area. While there's no real way to predict how long the sale will take, it's a good idea to start taking offers for your current home before you start making offers on a new one. You don't want to get stuck with two mortgages, so timing is key.
Let's say you start your new job on June 1. Your current house should be on the market in January, according to Greg Chaplain, licensed agent at The Real Estate Group, LLC. That will leave 60 to 90 days for you to get offers on your current home before you begin narrowing down potential new houses in March or April.
3. Choose a Specific Region
While you might be able to specify details like traditional versus modern or urban versus rural, your realty expert can help you select the region of the city that best suits your needs.
It's not always as simple as picking whatever's near the military base. Ask your agent to give you the scoop on where to find the safest neighborhoods, best schools or shortest commute, which will all help further narrow down your search.
You'll have to be extra specific when giving the real estate agent a list of preferences for your new home. Since you can't be physically present for the entire home search, the list will act as a guide for the real estate agent as he or she walks through any potential prospects for you.
"We'll have a lot of conversations upfront. I'll ask some basic questions to determine your criteria and then comb through properties that meet your criteria the closest. It's like peeling back the layers on an onion. We'll peel back the layers on a fine amount of properties – 8, 10, 12, 15 – until we see what's right for your family. Let's say I send you half a dozen properties, and you say, 'I really like this one.' I'll go check it out for you and get you on the phone to walk you through it with me."
4. Make a Trip to the New State
As you near the end of your new home search, it's crucial to travel to see the property (or properties) you and your real estate agent have selected. Even the most experienced and trusted real estate agents can't possibly convey every little detail, so you'll want to see for yourself before you purchase a property.
Make the trip one or two months before you're set to move or start a new job. At that point, you should have a buyer under your belt for your current home or at least be in a position to sell soon and be ready to make an offer on a new house during the trip.
5. Move to Your New Home
If all goes as planned during the trip, you'll be ready to start moving once you return.
The move itself, which once paled in comparison to the sell-and-buy transactions, can now seem just as stressful. While you might be able to move by yourself for a simple move up the street or to the next city over, it may be best to enlist the help of professional movers when moving to a different state.
If you can, start planning for the move at least two months in advance, generally around the time you make the trip to your new city. Begin by sifting through your possessions, selling or donating everything you no longer use. The less you have to move, the less it'll cost to move.
It's also important to stay organized amid the chaos. Make a checklist to keep track of everything you need to do before, during and after the move.
Moving can be taxing, but it can also be an incredibly invigorating experience. It marks the end of an old chapter and the beginning of an exciting new one. Good luck, and let Veterans United know if there's anything we can assist you with or if you have any other tips to share!
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