According to the VA, you need to live in the home that is purchased by the loan. Below is a snip from their Purchase Loan page:
Am I eligible for a VA-backed purchase loan?
You may be able to get a VA-backed purchase loan if you meet all of the requirements listed below.
All of these must be true. You:
- Qualify for a VA-backed home loan Certificate of Eligibility (COE), and
- Meet our—and your lender’s—standards for credit, income, and any other requirements, and
- Will live in the home you’re buying with the loan
Based on what I see on their site, the VA funding fee is part of a VA-backed home loan. The third bullet point says that you must live in the home. Since you are renting the home, I would recommend not deducting the VA funding fee without further reading the VA loan documents to see if there are any exceptions.
@vikikavisal
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