The VA loan is widely recognized for its incredible benefits, from zero down payment options to competitive interest rates. However, there’s one lesser-known advantage that VA loan buyers should know—especially if you’re planning to buy a new home and rent out your current one.

No Lease Required to Offset Your Mortgage

If you’re buying a new home and plan to rent your current property instead of selling it, the VA loan offers a significant perk: you don’t need a signed lease to offset your existing mortgage for your debt-to-income ratio (DTI). This is a unique benefit of the VA loan.

With conventional loans, lenders typically require a signed lease to consider rental income when calculating your DTI. But with the VA loan, lenders can use prospective rental income to offset your current mortgage. This makes the process much more flexible and buyer-friendly.

What Is Prospective Rental Income?

Prospective rental income refers to the estimated income you could earn from renting your property. While the specific requirements vary by lender and underwriter, the general process is straightforward. Most lenders will accept documentation like:

• Comparable rental analyses
• Reports from a property management company
• Rental market analysis from a licensed realtor

Why It Matters to Work with a VA-Experienced Lender

Not all lenders are created equal when it comes to VA loans. This benefit, while fantastic, isn’t always well-known or well-utilized by lenders who don’t frequently work with VA loan buyers. For example, I learned about this benefit while discussing a client’s options with my lender, Bill Christopher, at Federal Savings Bank in Oldtown. His experience with VA loans ensured my client had multiple strategies to move forward confidently.

When you work with a lender who specializes in VA loans, they understand the regulations inside and out. They can guide you through the best options tailored to your situation, making the home-buying process as smooth as possible.

Ready to Learn More?

If you’re in Virginia and want to explore the advantages of the VA loan, I’m here to help. From understanding how prospective rental income works to connecting you with the right lender, I’ve got you covered.

Not in Virginia? No problem. I can connect you with an experienced agent or lender in your area who specializes in VA loans.

Don’t miss out on the unique benefits the VA loan has to offer. Reach out today, and let’s discuss how this incredible program can help you achieve your homeownership goals!