How Does A VA Renovation Loan Work?
Home owners renovate their homes for a variety of reasons. Suppose you are a veteran or active military personnel who wants to buy and renovate a fixer-upper, or you just want to make minor home renovations on your existing home. A VA renovation loan is a good loan product to consider.
Since there are older houses in the market than newer ones, most buyers are buying homes that need a facelift.
In the past, VA loans would not cover the cost of home improvements leading borrowers to apply for a second loan for their home renovation needs.
In 2018, the VA renovation loan addressed this problem of getting a supplemental loan for home improvements.
Let’s see how this loan works and who would benefit from this type of loan.
A veteran loan in Massachusetts may be a good idea if you want to fund your new home purchase.
This is how a VA renovation loan works.
A VA home renovation loan is designed for buying properties that don’t meet the minimum livability requirements during closing. This allows veterans to add home renovation expenses of up to $50,000 but not exceeding $75,000.
The loan also requires a registered third-party contractor to complete the project, which means no DIY for those planning to complete the renovations on their own.
Repairs must also meet local and state property standards within 90 days of loan administration.
If you are looking for the best loan products to finance your home and renovation needs, reach out to a Plymouth mortgage broker and get the best deals.
What are the advantages of getting a VA renovation loan?
When you apply for a VA renovation loan, you can borrow the purchase price of the home plus extra for any improvements or repairs needed to make the house habitable. You don’t need to apply for a supplemental loan to fund repairs which makes a VA renovation loan a perfect choice if you want to buy a home that needs some TLC.
Remember that the loan can’t be used to remodel the entire home or make major renovations. One of the goals of a VA renovation loan is to make your new home meet the livability standards of VA financing.
If you plan to add a swimming pool or jacuzzi, repair a leaky roof or replace worn-out floors, this loan won’t work for you.
Still unsure if a VA renovation loan is the right loan product for you? You can ask our loan experts at Cedar Wood Mortgage.
We have years of experience working with veterans and active military members who purchased homes that need repairs.
Call or send us a message to learn more.
* Specific loan program availability and requirements may vary. Please get in touch with your mortgage advisor for more information.