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VA loan house hacking: Can I do it? And how would it work if I could?

Yes, you definitely can house hack a home when utilizing the VA loan.

But first, that means we just got to understand what house hacking means.

House hacking simply is where you’re purchasing a home as your primary residence and you intend on renting out some of the rooms.

Now, here’s the deal, primary residence – meaning that you plan on owning the home and living in it.

And as long as you’re going to live in a home and it’s going to be your primary residence, the VA loan will work.

We will gladly lend to folks when they’re purchasing a home as their primary residence. If you happen to have some tenants, folks do that quite often, that’s an okay thing, as long as you’re living there.

Because one misnomer is some folks assume, hey, I can use a VA loan to go buy investment properties.

You can’t.

But you can use a VA loan to buy a primary residence, and if you rent out some of it, okay, but you’re living in it.

The key is you’re living in it.

And if you happen to buy a duplex, a triplex, a quad – VA loan works for that as well. Because as long as you’re living in one of the units, if it’s a duplex, Triplex, quad, then that counts for a VA loan.

But the whole concept of house hacking really is more around, hey, I’m buying a home, I’m living in it, and I got some buddies that might rent out some rooms.

And we see this all the time.

So, with folks that we’re working with that are moving especially to military schools, so that could be the AFIT for the Air Force, Naval Postgraduate School for those in California and the Navy, or if you’re coming to Kansas, Fort Riley stuff for the Army.

Folks might buy a house and then they’ll buy it, they might be there for the short term but they’ll purchase it and then they got a few friends who are also coming and they’ll rent out some of the rooms while they’re living there.

Now here’s the deal, we can’t utilize the income from those buddies who might be renting out your rooms.

So, it’s got to be based off of your income as your primary residence.

The key is you’re going to live there, it’s going to go off of your income.

Now when you leave, if you move away, PCS, make that move afterwards, then it is possible to utilize rental income from a long-term lease if you end up renting it out.

Short-term we can do that as well; we just have to have some good documentation on those rents.

But that’s how you can really use the VA loan to house hack. You do it just like you would with a conventional loan buying a regular house.

The key is when you’re house hacking – meaning buying it, rent out individual parts – you got to be buying it as your primary residence and intending on living there.

That has to be the purpose.

And if you got some buddies who are there with you helping make it happen, all the more wonderful.

Just know that when we qualify you, it’s going to be based on whoever is on that loan.

So, if you’re buying it to house hack and you’re the only one buying the home, it’s going to be solely of your finances. And we can’t utilize what you estimate to rent those rooms out to different friends.

That can’t work because it’s got to be just done off of your income.

But once you leave, the income can be utilized as long as we have it well documented through a lease.

Or, if it’s short-term stuff – as long as we get documents on some tax returns, we can be in good shape.

And another thing you really want to consider if you’re doing house hacking though, is that technically it’s like you’re doing many rentals within the house.

So, you got to be aware of who you’re bringing in. Some folks assume house hacking – “just wonderful,” “it’s the best thing ever,” “it’s how you can offset your income,” “make more money,” wonderful.”

Yeah, there are a lot of benefits.

But remember, you’re still essentially a landlord.

So, if you end up inviting one of your friends in to live within one of the bedrooms within the house, and they’re renting it from you – I mean if they decide to essentially be a squatter, not pay in stuff – you run into the same things that typical landlords will run into when they’re renting out single-family homes.

So just be aware of that you run some of those risks and especially if it’s a close friend it might be a little odd. But you really want to maybe work on trying to make sure you have a lease agreement. Something in place that helps protect you.

So know that while there can be a lot of benefits to doing house hacking, there also are some potential drawbacks and you make sure you prepare for those to mitigate them.

Understanding that tenant relationship is big, so outlining a lease or some form of agreement with them is one major thing you want to do.

The other thing is just knowing hey who’s taking care of utilities.

Like for example, when I was in the Air Force, when I first got in, that is what I did. I purchased a nice house and then one of my best friends was coming out to the same base with me, and we got a house. And he ended up renting from me – essentially house hacking the house, right.

So, I bought the house because he wanted to see if we get a really nice place with our BAH, or housing allowance. I wanted to see if we get the smallest place and split it.

Our agreement was: I’ll buy a nice house, he’ll rent from me, and on we go.

It allowed me to start building my rental portfolio, him to get a nicer place at a little lower cost, and me to have someone help pay for the mortgage and make it work.

But the deal is, I know also going to that relationship when we did that, we all of a sudden realized – we got to talk about some other things.

What about utilities? What if we did have some issues with maintenance and work on the home?

So, often times when you’re doing this house hacking, you want to outline those things clearly.

And that’s where that agreement becomes really big.

You want to talk about the responsibility of when rent is due.

You want to talk about who’s responsible for fixing things.

I’ve seen house hacking folks still put it on the individuals who are renting out the rooms. I get that, or sometimes it’ll just be the owner will take care of all the major issues. Or maybe there’s some things that are kind of a mix between the two.

You want to outline utilities, especially when you’re living there, because house hacking, again with the VA loan – it’s got to be your primary residence.

Since you’re living there, you want to make sure you outline how are we handling these utilities. Is it going to be that each person that’s moving in with you – let’s say you’re at school at AFIT, NPS, or up at the Army School in Fort Riley – and you’re all of a sudden saying hey I’m going to rent out the room to you for 500 bucks a month, or something.

Well, does that include utilities or not?

You want to clarify all those things.

it’s an important one to think through; but overall, if you can get it done and do it well, yes house hacking can have some wonderful benefits.

The experience that I personally have with that was, it allowed me to save up funds.

Because now, all of a sudden, my mortgage was offset, and I could save up my additional housing allowance to prepare and go out and buy the next rental property that I did purchase. And then it blossomed into another one in small apartments and grew from there.

And it was all because I did take that house hacking step.

Now, if you’re in the position where oh man I think I really want to do this but boy I got a wife and three kids.

I mean my world where I’m in now, I’m not house hacking.

But you could utilize the VA loan to purchase a duplex, Triplex, quad again and rent out those other units to help you offset your payments. That is possible and then you have your own space.

We’ve seen, even helped, folks buy nice garden style duplex, triplexes so then they have their own little yard areas, everything. Those are out there, just know that is another way that you can kind of do the same thing as house hacking, like true house hacking.

But do it when you might have some additional responsibilities in life, or you just don’t want someone walking in in the morning while you’re drinking your coffee, and they’re walking in on you too, and it can just sometimes be awkward.

Buying duplex, triplex, quad – one of the ways of doing that while still utilizing a VA loan as a primary residence.

My name’s Evan Kaufman your VA loan originator hope this helps you go out there and win a home with a VA loan take care.

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2024 VA Home Loan Guide

VA Guide

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