Buying a fixer-upper isn’t for everyone. But for someone willing to take on such a project, there can be a lot of benefits. Fixer-upper homes are generally more affordable, and usually face less competition from other buyers. But if you’re buying a home with a VA loan, you may be wondering if it’s even possible in the first place. Does the VA offer loans for homes that aren’t move-in ready? Here’s what you need to know.
Can I Get a VA Loan for a Fixer-Upper?
Yes. It is possible to purchase a fixer-upper home with a VA loan. But the process is slightly more complicated. For one, not many lenders offer these types of loans. Those that do will have very specific requirements for the repairs made to the home. Borrowers who go this route may have to jump through some extra hoops.
Requirements for VA Renovation Loans
Here are the requirements you’ll have to meet in order to qualify for a VA renovation loan:
Meet VA Loan Requirements
The borrower must meet VA requirements for a home loan. That includes Minimum Service Requirements and obtaining a Certificate of Eligibility. Lenders may also have additional requirements such as credit score minimums.
Primary Residence
VA rehab loans can only be used for a primary residence. That means you cannot take out a VA renovation loan to complete work on a second home or vacation property.
Allowable Improvements
This type of loan can only be used to make improvements that enhance the safety or habitability of the property. The alterations and repairs must be those ordinarily found on similar properties of comparable value in the community. Furthermore, all repairs must be completed by a VA-approved contractor. You may also be required to get quotes from contractors beforehand.
Timeline
All repairs and renovations must be completed within a certain timeline. Usually, this is about 90-120 days after the loan closing.
Maximum Renovation Amount
In most cases, the lender will place a limit on the amount of money that can be spent on repairs. Though every lender is different, this amount is often capped at $50,000.
Additional Requirements
In addition to the criteria mentioned above, you’ll also have to get the home appraised. Then, you’ll have to get an inspection after the repairs are complete. Your lender may also have additional requirements that you’ll need to meet.
Get Help from Mortgage Solutions Financial
If you’re thinking about buying a fixer-upper home with a VA loan but don’t know where to start, we’d be happy to point you in the right direction. Call our office today to speak to a VA loan expert.
