How Veterans Can Use VA Loans to Buy Apartment Buildings (and Build Wealth)

The VA loan is one of the most powerful and underutilized benefits available to U.S. military veterans and active-duty service members. While many use it to buy a single-family home, fewer realize it can also be used to begin a real estate investing journey — specifically through the purchase of small apartment buildings.

If you’re a veteran looking to build long-term wealth, this guide will show you how to leverage your VA loan to buy multi-family property, earn rental income, and even reduce or eliminate property taxes if you’re a disabled veteran in Illinois.

✅ Can You Use a VA Loan to Buy an Apartment Building?

Yes — but with a limit.

The VA loan can be used to purchase multi-family properties with up to 4 units (a duplex, triplex, or fourplex), as long as you live in one of the units as your primary residence.

Properties with 5 or more units are classified as commercial and do not qualify for VA financing.

💰 Why VA Loans Are Ideal for First-Time Investors

Using your VA loan to buy a small apartment building is often referred to as “house hacking” — living in one unit while renting out the others to offset your mortgage. Here’s why it works so well:

$0 down payment – No need for a 15–25% down payment like conventional multi-family loans.
No private mortgage insurance (PMI) – That’s more money in your pocket each month.
Low interest rates – VA loans usually offer lower rates than investment loans.
Rental income – Can help cover or even exceed your mortgage payments.
Build equity and long-term wealth – While providing housing to others.

📋 Requirements to Use a VA Loan for Multi-Family

You must live in one of the units as your primary residence for at least 12 months.
The property must meet VA’s Minimum Property Requirements (MPRs) — ensuring it’s safe, sound, and sanitary.
Projected rental income may help you qualify — if properly documented and supported by an appraisal.
The property must have 1–4 units — anything larger is ineligible.

🛑 What About 5+ Unit Apartment Buildings?

VA loans cannot be used to purchase buildings with five or more units. These are considered commercial properties and require different financing.

That said, buying a 2–4 unit property with a VA loan is a smart first step. After building equity and gaining landlord experience, you can eventually refinance or use other financing options to grow your portfolio.

🪖 Illinois Disabled Veterans May Qualify for Full Property Tax Exemption

If you’re a disabled veteran living in Illinois, there’s even more financial incentive to use a VA loan to purchase a multi-unit property.

Thanks to the Standard Homestead Exemption for Veterans with Disabilities, qualifying veterans can receive a partial or full exemption on their property taxes:

30% to 49% disability rating: $2,500 reduction in assessed value
50% to 69% disability rating: $5,000 reduction
70% or higher disability rating: FULL exemption on the first $250,000 of your home’s assessed value

👉 That means many disabled veterans pay zero property taxes, including those who live in one unit of a multi-family home and rent out the others.

To qualify:

You must own and occupy the property as your primary residence.
You must apply annually (unless you’re 100% permanently and totally disabled).
You’ll need documentation from the VA regarding your service-connected disability rating.

This exemption can make your investment even more profitable by dramatically lowering your monthly expenses.

🔑 How to Get Started: Step-by-Step

Check your VA loan eligibility – Request your Certificate of Eligibility (COE) through your lender or the VA.
Get pre-approved – Work with a VA-approved lender who understands multi-family financing.
Find a 2–4 unit property – It must meet VA standards and be a good fit for owner-occupancy.
Make your offer and complete inspections – VA loans require a special appraisal and may flag repairs.
Close, move in, and start renting – You’re now a homeowner and a landlord.
If applicable, apply for the Illinois disabled veteran tax exemption with your county assessor.

💬 Final Thoughts

VA loans aren’t just for buying your forever home — they’re a powerful gateway into real estate investing. With no down payment, no PMI, and access to low interest rates, veterans can use these loans to purchase 2–4 unit properties, live in one unit, and earn income from the others.

And for disabled veterans in Illinois, the benefits are even greater. A potential full property tax exemption means more cash flow and less risk, making your investment an even smarter financial move.