Sub2 on VA loan; can seller get another VA loan?

General Real Estate Investing
1

Hi all,

I am in Austin, TX. Seller called & said she is moving to DC. I can take over payments but she says it is a VA loan and that she wants to buy another house once she is in DC. Says she cannot get a VA loan as long as this one is in her name.

What can I do? Any suggestions?

Thanks,

“B”.

2

srb,

Glad to meet you.

She is correct, the VA will not give her another loan until a Release of Liabilty is issued, meaning the old loan is paid off.

You could explain she still has the option of FHA or a conventonal loan to purchase her next property, which are her only options, unless she sells the property outright.

If she is not in the postion to sell outright, then her options are have you do a Subject To on the property or figure out what she is going to do with the property when she moves. Tell her she will have to get creative if she needs help.

John $Cash$ Locke

3

B,

In addition to what Cash said, I’d hit her with 2 other tidbits of info…

  1. VA loans aren’t the only zero or low down loans in town anymore.

  2. VA loans are expensive. The funding fee is 3.3%for the second time they get a VA loan… OUCH! Here’s the site:
    http://www.homeloans.va.gov/docs/funding_fee_tables.doc

In other words, VA really isn’t the deal it used to be and there are plenty of other loan products available for someone without much of a down payment.

-Andrew