Here are some frequently asked questions about VA renovation loans.
Be sure to also see my blog post, The Complete Guide To VA Renovation Loans.
Yes, the VA has a renovation program that allows you to roll in renovations into the mortgage loan
The VA renovation loan program is a program that allows eligible veterans to combine a purchase or refinance with eligible home improvements into a single VA backed mortgage loan.
One of the great benefits of the VA reno program is that the home being purchased does not need to meet VA minimum property requirements at the time of sale. However, you will need to get it reinspected after the repairs are completed to ensure that all of the safety deficiencies have been resolved.
Information about the VA renovation loan is in Chapter 7, Section 4 of the VA Handbook.
Yes, you can buy a manufactured home with the VA renovation program.
Yes, a VA renovation loan can be used to purchase a condo that is VA approved.
The VA guidelines allow the VA renovation loan to be used to purchase a mixed-use property. However, it can be extremely difficult to find a lender that would allow this.
Lenders set their own guidelines for interest rates. Most lenders charge more for the VA rehab loan than for a regular VA home loan.
Yes, some closing costs associated with the VA renovation loan are higher than those on a regular VA loan. However, the renovation-specific closing costs can be financed as part of the renovation budget. Veterans should consider the added costs when considering the VA renovation program option.
A HUD Inspector, also known as a 203k inspector, is required if the renovation budget is over $50,000.
Many different types of repairs are allowed on the VA renovation loan. Some of the allowable repairs include fixing health and safety issues, connecting sewage and plumbing, replacing AC systems, mold remediation, installing new roofing, making energy conservation improvements, making the home disability accessible, removing lead-based paint, and removing asbestos.
Each lender has different rules regarding non allowable repairs. Most won’t allow structural work, luxury items, landscaping or moving a home to a different site.
Each VA reno lender has their own rules, but most require all repairs to be done within 4 to 6 months,
When using a VA rehab loan, normal occupancy rules apply, which is 60 days after closing. Occupancy can also be delayed upon request in certain cases like PCSing.
When the VA appraisal is ordered, the purchase contract is submitted along with the repair estimate. The appraiser will determine the projected after repaired property value for the appraisal.
The VA guidelines do not address self help. However, nearly all VA lenders will require you to use a VA approved contractor when using the VA renovation loan.
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Yes, you can use a VA loan to buy a home and fix it up but only if you use the VA renovation program. The regular VA loan has minimum property requirements that need to be met.
Yes, a VA renovation loan can be done as a refinance.
If you are VA eligible, the VA renovation program will have the lowest closing costs. Other mortgage programs to consider are the FHA 203k program and Fannie Mae Homestyle.
Yes, bathroom remodels are an eligible repair on the VA renovation program.
Yes, kitchen remodels are an eligible repair on the VA renovation program.
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Yes, roof replacements are acceptable repairs on the VA renovation program.
The drawbacks of VA renovation loans are: the loan could take longer to close, not every repair is eligible and repair limits may apply
There is no minimum credit score to get a VA renovation loan. However, it is very hard to get approved if your credit score is below 580.
It is possible to get a VA renovation loan with bad credit. However, very few lenders will approve someone with a credit score below 580.
VA guidelines do not state a specific limit for the renovations. Each lender sets their own limits and most have repair limit set between $50,000 and $100,000.
VA renovation is the renovation program from the VA. 203k is FHA’s renovation program and Homestyle is Fannie Mae’s renovation program. Each have their pros and cons but they all work in a similar way. All of these programs allow you to roll renovation costs into your mortgage loan.
The VA renovation program was suspended during Covid due to appraisal issues. However, the program is now active and fully operational.
The best place to find a VA renovation lender is through a mortgage broker.
As of 2023, Veterans United does not offer the VA renovation program.
As of 2023, USAA does not offer the VA renovation loan program.
Take the 30 second mortgage quiz to see if you qualify
As of 2023 Rocket Mortgage does not offer the VA renovation loan program.
At this time, Navy Fed does not offer the VA renovation loan program.
VA renovation, VA reno and VA rehab loans are all the exact same program.
A VA renovation loan can be used to buy a foreclosure if the terms of auction allow it.
Yes HUD foreclosed homes can be purchased under the VA renovation loan program.
No, flip houses cannot be purchased on the VA renovation loan program. All VA loans require the veteran to intend to occupy the home for at least a year.
Yes, you can buy a multi family home (up to 4 units) on the VA renovation loan program as long as you occupy at least one of the units. You can even use the rental income toward qualification.
The VA loan program is only for owner occupied properties. The only way to buy a rental home on the VA renovation program is by purchasing a multi unit property and living in at least one of the units.
Yes, VA renovation loans have the same features as any other VA mortgage program. You could do a cashout refinance or a IRRRL streamline refinance at a later date if you choose to.
Yes, VA renovation loans have the same features as any other VA backed mortgage. Per VA guidelines, these mortgages are all assumable.
The VA renovation loan does not allow for deferred payment during the renovation period. If you are unable to live in the property during renovation, you may have to make two housing payments.
Yes, a disabled veteran can use the VA renovation program to make safety improvements to improve accessibility.
While the VA does not specify when the contractor is to receive payment, most lenders do not allow for an initial materials draw. The contractor will have to complete at least some of the work and submit a draw request to receive payment. After the work is completed, an inspection will be done for the contractor to be eleigible to receive their final payment.
I can provide VA renovation mortgage financing in all states where I am licensed.
I’m currently licensed in Alabama, Arkansas, Arizona, California, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Michigan, Minnesota, Mississippi, Missouri, New Mexico, North Carolina, Ohio, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, Washington, and Wisconsin.
Additionally, through our corporate partner program, our team is able to leverage our home office and offer mortgage financing in several additional states.
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If you’ve been denied for a VA home loan by major lenders like Veterans United or Rocket Mortgage, don’t lose hope. You still have a strong chance of getting approved. The reason? Many big online lenders enforce additional rules known as lender overlays, which go beyond what the VA itself requires.
Manual underwriting is a process that involves a human underwriter reviewing an applicant’s financial information instead of an automated system. This process can be used for VA loans when the VA’s algorithm doesn’t approve an applicant, or when an applicant has certain negative items in their credit history.
Are you worried about your credit history affecting your chances of getting a VA home loan? In this video, we break down the VA’s rules regarding credit occurrences and explain how you can potentially overcome credit challenges.
Take the 30 second mortgage quiz to see if you qualify
