The VA Loan program is a fantastic and flexible option for those who have served in the military. There is a common question that comes up every so often from potential borrowers. They want to know if they can use the VA loan for home repairs. The answer is actually yes, but it involves using the VA loan in a somewhat different way.
VA Loan For Home Repairs
You can indeed use the VA loan for home repairs. There are actually several ways that this can be done including:
- Going the route of VA Cash Out Refinancing.
- Use the VA Energy Efficient Mortgage (EEM) at the time of the initial home loan or refinance loan.
- The VA loan for alteration and repair.
According to Chapter Seven of VA Pamphlet 26-7:
VA may guarantee a loan for alteration and repair of a residence already owned by the veteran and occupied as a home, or made in conjunction with a purchase loan on the property.
There are a few rules in place for applying for these types of specific VA loans including some of the following:
- The alterations and repairs must be those ordinarily found on similar property of comparable value in the community.
- The cost of alterations and repairs may be included in a loan for the purchase of improved property to the extent that their value supports the loan amount.
As stated above, the VA loan rule book does make plenty of provisions for using this type of loan when needed. However, it is still important to understand that these loans are only made available from participating lenders. A VA lender may choose not to offer this type of loan, so if that is the case you will need to look for another lender/financial institution.
Borrowers trying to use the VA Loan Program for home repairs can expect to go through the usual steps, including a credit check, though in many cases an actual appraisal may not be necessary. This is up to the lender and is at their discretion.
if you are thinking about using the VA Loan program for home repairs go ahead and contact us and lets take a look at the situation together.