PCSing? You May Not Have to Sell Your Current Home to Qualify for Your Next VA Loan
Updated: Oct 25
One of the first things I hear from homeowners getting ready to PCS is, "I don't think we can buy again unless we sell this house first." Maybe. But before you put your house on the market because you think you have to, let's actually run the numbers. If you're planning to keep the home you're leaving and rent it out, VA financing has an important option that can make a big difference when we qualify you for your next home.
Depending on the file and required documentation, we may be able to use market rent from your departing residence to help offset that mortgage payment. And you don't necessarily have to already have a tenant living there for us to evaluate the market rent. Combine that with the possibility of having remaining VA entitlement, and keeping your current home while buying at your next duty station may be much more realistic than you thought.
"But I Can't Qualify With Two House Payments"
This is where I want to make it really simple. Let's say the mortgage payment on the home you're leaving is $2,000 per month. Market rent for that home is $2,200 per month.
Instead of automatically qualifying you as though you're simply carrying that entire $2,000 payment with no rental income coming in, we may be able to use the allowable portion of the home's market rent to help offset that mortgage payment. That can make a huge difference in your qualifying numbers. You don't necessarily need to rush out and put a tenant in the property just so we can have the conversation. Depending on the circumstances and documentation, market rent can potentially be established for the departing residence and considered under the applicable VA and lender requirements.
A Simple Example
Current mortgage payment: $2,000 per month Market rent: $2,200 per month Potential result: The allowable rental income may be used to help offset the $2,000 departing-residence mortgage payment when we calculate your qualification for the new home.
This does not mean that $2,200 automatically counts dollar-for-dollar as qualifying income. The amount we can use and the documentation required depend on the applicable VA and lender guidelines. The important point is that we may not have to treat the home you're leaving as simply another full housing payment with nothing to offset it.
"But I Don't Have a Tenant Yet"
That's the part many military families don't realize. If you're leaving your current primary residence and intend to rent it, the fact that you haven't already placed a tenant in the property does not necessarily mean we have to ignore its potential rental income. We can look at the market rent and the documentation required for your specific loan.
So if you're getting orders and trying to decide what to do with your house, please don't assume you need to scramble to sell it or get a tenant moved in before you can talk to me about buying again.
"My Current House Has a VA Loan Too"
That doesn't automatically mean you're done using your VA benefit either. It is possible to have two VA loans at the same time when you have sufficient remaining entitlement for the next purchase. This is a separate calculation from the departing-residence rental-income question, which is why I want to look at both.
First, how much VA entitlement do you have available for the next purchase? Second, how does keeping the current property affect your overall qualification? Those two answers together give us a much better picture of what your options actually are.
Related guide: Can You Have Two VA Loans at the Same Time?
"I Have a Great Rate. I Really Don't Want to Sell."
I hear this one a lot, and it makes sense. If you bought or refinanced when rates were lower, selling a home with a great mortgage just because you're moving can be a hard decision. That doesn't automatically mean keeping it is the right financial decision. Becoming a landlord comes with its own costs, responsibilities and risks.
But I also don't want you selling a property simply because you believe your mortgage qualification requires it. Let's find out first. If the financing works while you keep the property, then you can make the decision based on what is best for your family and your long-term plans, not because you thought you had no other option.
What If You're PCSing to Little Rock Air Force Base?
If you're headed to Little Rock Air Force Base and still own a home at your current duty station, this is something we can start working through before you ever arrive in Arkansas. I can review your current mortgage, Certificate of Eligibility, remaining entitlement, the market rent for the home you're leaving, and the price range you're considering here. Then we can look at what buying around Cabot, Jacksonville or another Central Arkansas community could look like while keeping your current property.
And if your PCS timeline is tight, that doesn't automatically mean we need months to get everything done. When the file and circumstances allow, my team can close in less than two weeks. We can also work with the appropriate professionals to coordinate the transaction remotely when available, so you may be able to close before you even arrive in Arkansas. You take care of getting your family through the PCS. My team and the professionals I work with will help take care of the homebuying side.
So Should You Keep the House?
That's not a decision I'm going to make for you. Maybe keeping it as a rental makes a lot of sense. Maybe after we run the numbers, selling is clearly the better choice for your family. What I don't want is for you to make that decision based on the assumption that you can't qualify for your next home while you still own the first one.
Before you list the house because you think you have to, let's look at three things: 1. Your remaining VA entitlement. 2. The market rent and mortgage payment on the home you're leaving.
3. Your qualification and comfortable payment range for the next home. Then you'll know what your actual options are.
Please Don't Sell Your House Just Because You Think You Have To
If you're PCSing and already own a home, talk to me before you make a financing decision based on what you assume the VA will or won't allow. You may still decide to sell. But you may also find out that keeping the home, using rental income to help offset the departing mortgage, and using your VA benefit again is possible. Let's run the numbers first.
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