How to Make a VA Renovation Loan Work for You
If you’re having a hard time getting your offers accepted when attempting to buy a house, you might wonder if there’s another way to purchase a move-in-ready, standalone home. One alternative you can consider is purchasing a fixer-upper and renovating it into a cozy home for you and your loved ones.
If you’re capable of qualifying for a VA loan, you’re also going to be able to qualify for a VA renovation loan, which can be a helpful option if you plan on purchasing a house that isn’t move-in ready.
Let’s take a deeper look at how this loan works and how you can apply for one.
What is a VA Renovation Loan?
A VA renovation loan, also known as a VA rehab or VA home improvement loan, is a home loan that offers veterans and service members the chance to include the cost of necessary repairs or improvements in their loan amount.
Through this type of loan, a borrower can finance the property’s purchase price and repairs without getting a separate loan; instead, the costs of the repairs and the home are rolled into a single loan with one monthly payment.
Contact our loan officers for assistance if you want to apply for a VA Renovation Loan in the DC metro area.
How to Apply for a VA Home Improvement Loan
Let’s go over the process of applying for a VA home improvement loan:
Get a Certificate of Eligibility
First, you must guarantee that you’re eligible for a VA loan. You can get your COE by applying online using the VA’s eBenefits or work with us to get one.
Work with The Mortgage Option to get preapproved for the loan.
Pick Your Contractor and Get a Quote
The VA doesn’t approve contractors but requires your contractor to register with their closest VA Regional Center to get a VA builder ID number.
Get Your VA Appraisal
You will be requested to schedule a VA home appraisal, which a VA-certified appraiser will do. The appraiser will determine the property's value and the value of repairs and improvements you plan to undergo.
Close the VA Renovation Loan
After everything gets approved, you’ll close the VA home improvement loan. The renovations begin after closing.
Repairs and Improvements are Completed
You’ll guarantee that your contractor is completing the repairs and improvements. Your lender will be in charge of disbursing and managing the repair funds.
A VA appraiser will review your property to confirm that the project has been completed and that everything fits within the VA’s minimum property requirements.
If you’re struggling to find a move-in-ready house with your allotted budget, taking out a VA renovation loan is a great way to make the process smoother and cheaper. Fortunately, loans backed by the VA are more lenient and beneficial to eligible borrowers than traditional loans.
If you’re ready to apply for a VA renovation loan, call our mortgage brokers to start the application process.
* Specific loan program availability and requirements may vary. Please get in touch with your mortgage advisor for more information.