Are there Acreage Limits for VA Home Loans?

Is country life calling your name? Do you dream of blue skies, acres of land, and a peaceful, quiet life in the countryside? The VA home loan program allows qualifying veterans to buy and build homes in rural areas. But are there acreage limits for VA home loans? Here’s what you need to know.

VA Loans & Buying Land

You cannot use a VA loan to buy land alone. However, qualifying veterans can use VA loans to:

Buy land and build a primary residence on it (VA construction loan)
Buy land that’s attached to an existing home for sale.
Build a home on land they already own or obtained with other means of financing.

Is There a Limit to How Much Land You Can Buy with a VA Loan?

If you’re thinking about using your VA home loan to move to a rural area, you’ll be happy to know that the VA does not set acreage limits. However, your lender may have their own set of restrictions.

VA Appraisal Issues

Many lenders set a limit on the number of acres you can buy with a VA loan because they want to avoid issues with the appraisal process. VA appraisers need to use comparable sales to assess the value of a property. If the property you want to buy has a lot of land, they need to be able to look at comparable sales that have occurred in the area. But if comparable sales do not have the same amount of land, you could run into issues.

Risks Associated with Buying Land

Lenders view homes with a lot of land as a higher risk. Properties with a lot of land generally take longer to sell. Additionally, if the home is foreclosed on, it may be difficult for the lender to recover their loss. This is not to say that you cannot buy a home with land using your VA loan. You just need a lender who is willing to work with your situation.

Land Hazards

It is unlikely that you’ll be able to use a VA loan to buy land that is located in a hazardous area. The land can’t be too close to a landfill, dump, or hazardous material facility. Additionally, it cannot be a high risk for geological concerns like landslides or earthquakes. It may be possible to buy a home located in a flood zone, so long as you purchase flood insurance.

The VA Does Not Set Acreage Limits; Lenders Do

The VA may not have restrictions on how much land you can buy with your VA home loan. But your lender might. If you’re planning on purchasing a lot of land, you’ll want to disclose this information to your lender right away, at the beginning of the process. That way, they can guide you in the best course of action and help you have a successful home buying experience.