This VA Loan Helps Finance Veterans’ Home Renovations!

VA Renovation Loan – We respect and value our Veterans. That’s why we have a special loan program that will help Veterans finance their home renovations. So if you’re a Veteran who is eager to build equity by upgrading your property, call us today at 302-703-0727 to get started, or you can APPLY ONLINE.

What Is a VA Renovation Loan?

The VA renovation loan is a VA-guaranteed loan program that allows qualified homebuyers to purchase or refinance a home and finance its repairs, renovations and/or improvements. It is a one loan and one closing that includes an escrow account to make the repairs after closing.

Who Are Eligible for the VA Renovation Loan Program?

The borrower must be:

• a qualifying active duty member of the US military 
• a veteran
• a surviving spouse

What Are the Requirements to Qualify for a VA Renovation Loan?

Please keep in mind that the list below is not meant to be exhaustive. Contact us and we’ll walk you through the program guide of our most current and complete list.

• One or two-unit home & Manufactured homes only
• Primary residence only
• Repairs must be minor remodeling or cosmetic in nature
• No minimum repair amount (HUD consultant required for all renovation projects exceeding $50,000)
• Construction must be completed within four months of closing
• Only one General Contractor may be used
• General Contractor must be registered with the VA
• General Contractor must carry sufficient insurance through a current general insurance liability policy
• Minimum FICO score of 620
• Borrowers need to meet the income, asset, and minimum property standard requirements set by the VA
• The following states and areas are ineligible: Alaska, District of Columbia (DC), Hawaii, Illinois, and the five boroughs of New York City

What Type of Home Renovations Are Eligible? 

The VA Renovation Loan can be used for:

1. Renovations for part/s of the house. When the homebuyer likes everything about a home except for a part of the house, say for example the kitchen area. The VA Renovation Loan will allow the homebuyer to finance the purchase of the home including the updates they want to make (like remodel the kitchen)—all with a single closing, as long as it is within the guidelines.

2. Roof renovations. The need for a new roof may put the home at risk for not qualifying for a traditional VA mortgage. The VA Renovation Loan could make purchase possible as long as it is within guidelines.

3. Repairs of an existing home. If the borrower already owns a home, cost of repairs can be financed by the VA Renovation Loan all with a single low, fixed-rate mortgage. This means no more second loan or second monthly payment.

What Type of Home Renovations Are Ineligible for VA Reno Loan?

The VA Renovation Loan can’t be used for remodeling every part of your home. Only VA-approved repairs, renovations and replacements are allowed to ensure that the home is livable to meet VA minimum property standards. This loan type is not intended to finance your dream-home remodeling.

Ineligible improvements include, but not limited to:

• Structural Modifications
• Oil Tanks (repair, removal, remediation)
• Any repair/installation for private water systems (Wells)
• Any repair/installation private waste management system (Septic Systems, Lagoon, Cesspools, Pits, etc)
• Mold Remediation
• Landscaping and site improvements
• Recreational or luxury improvements
• Purchasing an existing structure on another site and moving it onto a new foundation
• Any repair that will take more than 4 months to complete
• The repair prevents the Borrower from occupying the property for more than 15 days during the renovation.
• Any Repair that is done Self Help (Must use contractor)

What Types of Homes Are Ineligible?

The Following property types are NOT ALLOWED for VA Reno Loans:

• 3-4 Unit Properties
• Demolished Homes
• Razed Homes
• Structures relocated to/from another location
• Mixed-Use Properties
• Co-ops
• Condos
• Investment Properties
• Mobile Homes

What Home Improvements Are Allowed by the VA Rehabilitation Loan?

Common improvements allowed include:

• Foundation repairs
• Roof repairs
• Floor repairs
• Electrical and plumbing repairs or replacements
• HVAC repairs or replacement
• Paint (if lead paint is currently in the home)
• Energy-efficiency upgrades
• All Repairs MUST be completed within 4 months of closing

How Much Money Will a VA Renovation Loan Finance?

The VA doesn’t specify a minimum or maximum allowable amount for renovation funds. If you qualify and only want to make let’s say $4,000 to $5,000 in renovations, that’s completely acceptable. Do note that some lenders may have maximum amounts they’re willing to finance, so be sure to ask your lender before committing. If say for example the property needs $80,000 of renovations but the lender will only fund up to $35,000, then perhaps they may not be the right lender for your needs.

What Requirements Are Needed to be Approved for a VA Renovation Loan?

Before getting approval, you’ll need to:

• Submit plans for the specific renovations that need to be made, as well as information on the contractor
• Prove that the repairs will meet VA standards. This happens during the loan underwriting process.
• Have a list of the specific improvements, including how much those improvements are going to cost.
• Have a VA inspector assess the home to ensure it meets VA standards after all the repairs have been made.
• HUD Consultant is required when renovation costs are $50,000 or higher.

Are you a veteran, active duty member of the US military or a surviving spouse? Maybe now is the right time to increase your home equity—by applying for the VA Renovation Loan Program to upgrade your home! Contact John Thomas at 302-703-0727 or apply online, so we can get started. 

John R. Thomas – NMLS 38783
Certified Mortgage Planner – Primary Residential Mortgage, Inc.
302-703-0727 DE Office / 610-906-3109 PA Office / 410-412-3319 MD Office
248 E Chestnut Hill Rd, Newark, DE 19713