If you’re hoping to use a VA loan to fund the purchase of land, you may be asking a simple question: Are there VA loans for land? Sadly, the answer to that query isn’t so simple. In fact, the short answer is no, but the longer answer is yes. Talk about mixed messages! Fortunately, the advantageous nature of VA loans means that it is well worth taking the time needed to dig a little deeper and figure out how you might be able to use a VA loan to fund a land purchase.
Are There VA Loans for Land?
With VA loans, occupancy is a major concern. In fact, VA purchase loans can only be used to buy a home that are planning to use as your primary residence. When you consider that, it makes sense that the purpose of your purchase is a major factor in whether or not you can use a VA loan to reach your goal when you’re purchasing land.
Using VA Loans for Land
If you’re interested in buying just land, you’ll need to find another form of funding. However, if you want to buy a piece of land in order to put a home on it, then you may be able to use a VA loan to do it. Basically, if you want to buy land with a VA loan, then there has to be a home involved. However, as U.S. News & World Report indicates, that involvement can take many forms:
- You can buy land and build a home on it.
- You can refinance land that you already own and build a home on it.
- You can buy land that already has a home on it.
- You can buy land that already has a home on it and secure additional funds to renovate it.
- You can buy farmland with a residence that you plan to live in.
VA Land Standards
VA loans do require that properties meet certain standards to ensure that borrowers are getting properties that are safe, sanitary, and livable. While the standards for land might be different than for a home, they do exist. According to SmartAsset, the VA insists that land be stable. That means properties on floodplains or fault lines should be avoided. Proximity to an airport may also be an issue. In addition, the site will need to be checked for radon and drainage problems.
VA Construction Loan
If you’re hoping to use a VA loan to buy land, a VA construction loan might be a way to do it. As MilitaryBenefits.info explains, you can use a VA construction loan to purchase land to build on as long as you provide the proper documentation when you submit your plans to build a home. If the land was acquired within one year of closing, you can include the cost in the loan amount. If it’s been more than a year since you acquired the land, then you can include the value of the land in the loan. Similarly, if you were gifted the land, the VA will allow you to roll the value of the land into your loan.
VA Farm Residence Loan
Another situation where land comes into play is the VA farm residence loan. If you’re craving plenty of space to call your own, this loan may be a way to get it. According to MilitaryBenefits.info, the VA does not put acreage limits on a VA farm residence loan. However, it is important to remember that the VA’s focus is on providing funding to purchase homes, so the business aspect of an agricultural property isn’t going to win points with the underwriter. Instead, look at whether other farms of similar size in the area have been sold as residential properties rather than commercial ventures. If that’s customary for your area, then you have a better chance of securing your loan.
When you have questions about VA loans, reach out to PrimeLending: Manhattan, Kansas. We’re ready to talk about how your housing goals, how you can reach them, and what we can do to help. Contact us today to start the conversation.