Choosing between VA renovation and traditional home renovation loans, or a VA loan in general doesn’t have to be tricky. It all depends on your situation and needs.
For example, VA renovation loans allow you to purchase property and rehab it where some traditional home renovation loans don’t allow you to buy the land. And by taking a VA renovation loan you’re combining a traditional loan to purchase the property and a renovation loan to rehab it saving you time and money. Although this sounds good, VA renovation loans aren’t right for every situation.
VA renovation loans can only be used to purchase a primary residence and on repairs or upgrades that improve the safety and livability of the property. You cannot use VA renovation loans for vacation homes or accessory dwelling units like you can with many traditional home renovation loans. There are other restrictions that make VA renovation loans unique from other loan types.
The work done on your home using VA renovation loans must be completed by a licensed VA contractor. Examples of these repairs include:
But on a positive note, a VA renovation loan can be used to make your home handicap accessible or energy efficient. And there are numerous advantages of VA renovation loans over traditional home repair loans.
A VA renovation loan typically has low interest rates, doesn’t require any money down, and there’s no mortgage insurance. You can also can pick a repayment term of 10,15, 20, 25, or 30 years. Although the payback period is a big advantage for VA renovation loans over a traditional home loan, it may be a good idea to go the traditional VA loan route if you’re in a hurry.
Getting VA renovation loan is a slow process and requires more documentation than a regular VA loan. You will also have to pay a VA funding fee as part of your closing costs. And there is a cap on the maximum repair costs. To qualify for a VA renovation loan, you’ll need a credit score of at least 620, show a reliable source of income while having a debt to income ratio of 50% or lower (as of 8/11/2022).
If you meet these requirements and a VA renovation loan sounds like a good fit, then it’s time to apply!
There are 9 steps to getting a VA renovation loan.
And that’s it! Now you know if a VA renovation loan is a good option for you, if you qualify, and the steps you’ll need to take for this type of financing. And if you’re purchasing the home you’re going to need a title search and likely title insurance too. An good news, you get to choose which title company you go with, and we’d love the opportunity to be that choice. Call us at 703.934.2100 and let us earn your business.
Your closing disclosure is arguably one of the most important documents you’ll run into when…
Entrepreneurship is both thrilling and demanding. For business owners constantly juggling multiple responsibilities, time is…
March 12, 2024, Fairfax, VA – In a significant achievement for ATG Title, the Fairfax-based…
Real estate teams are gaining popularity among realtors, and in the United States alone, there…
In the ever-evolving landscape of business, maintaining a competitive edge demands adaptation and improvement. One…
Tough markets often lead people to try creative avenues to set them apart from the…