VA loans are similar to FHA loans in that the Department of Veterans Affairs isn't the group which makes the actual home loan. Rather, the VA insures the loan -- or, rather, a portion of the loan, to be exact.
The VA's loan insurance is known as the VA guaranty, and it gives U.S. lenders the confidence required to make 100% LTV mortgages to qualified VA borrowers... http://valoanguidelines.org/
Veterans can use their hard-earned home loan benefits to purchase condos, single-family residences, and even multi-unit properties so long as they plan to live in the home as their primary residence.
However, the VA won’t issue its guaranty for what it considers "ineligible purposes." http://www.benefits.va.gov
Some of those ineligible purposes can include :
> Buying land with the intent to build a home on it in the non-immediate future
> Buying a property to be used as a rental or investment property
> Buying a home to be used as a second home or vacation property
> Buying a home in a foreign country
Military borrowers wanting to use the VA loan program for anything other than a primary residence will find lenders unwilling to make such loans. The lone exception is for the refinance of a home which was previously owner-occupied, but which is now a rental home.
The VA will allow homeowners who once lived in a home which is currently a rental to refinance using the VA Streamline Refinance... http://vastreamlinemortgage.net/