You’re ready for more space, better appliances or an open-concept living area. But with the high prices of today’s housing market, buying a move-in ready home may not be an affordable option. In a limited inventory housing market, your best solution may be renovation, whether buying a home with potential and fixing it up right away, or upgrading a home you already own. Sound like an overwhelming project? Don’t worry, our VA Renovation Loan will help make the process easier.
If you are an eligible veteran, the VA Renovation Loan provides you all the benefits included with a traditional VA loan, such as zero down payment and lower closing costs, plus the ability to roll your renovation costs into the very same loan. It is one loan with one application and one monthly payment – and that could save you money when compared to taking a second loan to pay for the renovations.
Here’s what you need to know to apply for the VA Renovation loan:
- For Veterans Only – while it may seem like stating the obvious, only homes owned, occupied or purchased by veterans are eligible for this type of loan.
- Pay Off Your Loan in 30 Years – a VA Renovation loan can be financed over 30 years, which translates into a lower monthly payment.
- You Can Get a VA Renovation Loan at the Same Time as Your Original Mortgage Loan – the two loans are bundled together so if you’re buying a fixer-upper home that needs immediate repairs or upgrades you have the funds to do so at the time of purchase.
- A VA Renovation Loan is a Better Deal than a Supplemental Loan – Because the loan is rolled into your mortgage, it is one loan with one rate and one payment, instead of paying for a second loan which could be charged at a higher rate; therefore a VA Renovation loan can save you money.
- Immediately Take Care Of Pressing Problems with your Property – This loan can also help you make repairs and upgrades to a home you already own. It’s used to address electrical, plumbing, structural issues, updating kitchens and bathrooms, changing flooring, painting and making your home more energy efficient. It cannot be used for things like putting in a pool, building a patio or adding more rooms.
- You Can Use Up to 25% of your VA Renovation Loan to Improve/Replace Non-Fixtures – one of the benefits of the loan is you can purchase things like appliances, furnaces or hot water tanks as long as they relate to the original purpose of the loan; that means that you can use the loan to buy a stove if you’re remodeling your kitchen but not if you’re only remodeling your bathroom.
- Allowable Repairs – the repairs you can make include:
- Roof (repair or replacement)
- Paint (interior, exterior and lead paint removal)
- Kitchen (appliances, cabinets and total overhaul)
- Electrical (repair, replace, recondition and total system)
- Plumbing (repair, replace, recondition and total system)
- HVAC (repair or replace)
- Flooring, subflooring (tile, carpet and wood)
- Foundation repair
- Energy-efficiency upgrades
A VA Renovation Loan is a great home loan option if you’re an eligible veteran and have repairs you need or want to make when you’re buying a house. Because you can roll the repair cost into the original loan, you have a lot more options in terms of the type of home you can consider buying. It’s also a great refinance option, if you want to take advantage of lower interest rates and need funds for repairs. With all these options to consider, start the process by contacting a PrimeLending home loan expert today.