Imagine this: you found a home you love, had it inspected, and just got your report back from the appraiser. But the bad news – it needs some repairs to meet the VA’s minimum property requirements. Now you’re wondering, can you use a VA home loan to pay for the repairs? Here’s what you need to know.
Can I Buy a Home that Needs Repairs with a VA Loan?
When you’re using a conventional loan, buying a home that needs repairs is no big deal. But with VA loans, it’s another story. VA home loan requirements are stricter. Properties need to meet a set of criteria known as VA Minimum Property Requirements. If the home doesn’t pass, the borrower will need to pay for repairs if they want to move forward with their purchase.
The good news is, you can roll the cost of repairs into your mortgage using a VA rehab or renovation loan. So, yes, it is possible to buy a home that needs repairs with a VA loan.
VA Rehab & Renovation Loans
VA rehab and renovation loans are special programs that can help military borrowers pay for home repairs and improvements. They can be used to either buy a home that needs repairs or fix up a home that a VA borrower already owns.
To qualify, the borrower will need to be eligible for a VA home loan and be able to obtain a COE (Certificate of Eligibility). The borrower must also plan to use the home as their primary residence.
What Kind of Repairs Are Allowed?
There are some restrictions regarding the types of improvements you can finance with a VA rehab or rehab or renovation loan. You cannot use these loans to pay for cosmetic or luxury upgrades. For example, if you want to use the money to build a swimming pool, you will have to obtain the funds elsewhere. Additionally, stylistic changes like upgrading the bathroom vanity or replacing fully functional kitchen cabinets because of the way they look aren’t covered.
VA rehab and renovation loans can only be used to finance repairs that improve:
- The safety of the property
- The livability of the property
Chat with a VA Home Loan Expert
It’s normal to have questions during the homebuying process. If you’d like more insight or information about VA home loans, our staff will be more than happy to assist you. Call today to get in touch and speak with an expert.