PCS Orders and a House That Will Not Sell or Rent: How to Carry Two Mortgages on a VA Loan
Alyson is a fictional example, but her situation comes up often for military families. She gets PCS orders. The house goes on the market and sits. She tries to rent it and finds no serious tenant. Her report date gets closer, and she starts asking a hard question: can she qualify for a home at the new duty station while the old mortgage keeps coming due?
If you are in that spot, the answer is often yes, but the order you do things in matters. Here is how I would walk Alyson through it.
How a VA lender counts the old mortgage
When you apply for your next VA loan, the lender adds up your debts and compares them to your income. Your old house payment is one of those debts. Moving out does not remove it. Unless documented rent offsets it, the full payment counts against you.
That is the heart of the problem. An empty house with no lease looks, on paper, like a full payment with nothing coming in to cover it.
Step 1: Get the rent on paper
If Alyson finds a tenant, the lease is what turns rent into something a lender can use. Lenders typically count only a portion of documented rent, not all of it, because they allow for vacancy and upkeep. So a signed lease helps, but it rarely erases the old payment completely.
This is why I tell military families not to wait. A lease signed before the application is far more useful than a promise to rent later.
Step 2: Document all of your income
BAH is part of the picture for active duty families, and it can be documented as income when qualifying. Alyson also brings her base pay and any other documented income. A spouse's income counts too if they are on the loan. Getting every source documented cleanly keeps the file strong.
Step 3: Reserves and residual income
Beyond the debt-to-income ratio, VA has its own test called residual income, which looks at what is left after major obligations and living costs. Taking on a new car loan or running up cards before closing can hurt that test. Alyson holds off on new debt until after she closes.
Cash reserves matter too. Lenders often want to see savings left after closing when a borrower is carrying a second property. I cannot give Alyson an exact number without her full file, but the principle is simple: more cushion makes the file easier to approve.
Step 4: Know your entitlement
Using VA entitlement on the new home while the old VA loan is still open is possible, but your remaining entitlement can affect how much you can borrow without a down payment. A lender can calculate this for you early. Also, VA loans carry occupancy rules for the new home, and active duty families have specific ways to meet them. Ask about this before you write an offer.
If the house will neither sell nor rent
When neither route is working, Alyson has options:
- Adjust the price or condition if she wants it to sell.
- Bring in a property manager if she wants a better shot at a reliable tenant.
- Rent at the new duty station for a while instead of buying right away.
- Tell her insurance company if the home is vacant or rented, so coverage still fits.
- Keep the old mortgage current. Missed payments can damage the credit she needs for the next loan.
What Alyson does today
She adds up both housing payments, then asks a lender to run the numbers before she lists, signs a lease, or makes an offer. That one conversation shows her what the old mortgage will really cost her buying power, and which of the steps above matters most.
I am licensed in ten states, including South Carolina, so if your next duty station is in one of them, I can work it with you from here. Call me, Jason Sharon, at 843-LOW-RATE and I will find the path.
Home Loans Inc - Jason Sharon, Mortgage Broker. Company NMLS #1728740, Jason Sharon NMLS #1281448. Equal Housing Opportunity.
