Have you fallen in love with a house that is livable but in need of a little tender loving care? Are you intrigued by the idea of putting your own stamp on a property? Does the house that you already own have the potential to be your dream home with just a few adjustments or upgrades? If you’re a service member or veteran who is hoping to make some renovations to your home, be sure to take a look at the loan programs offered by the U.S. Department of Veterans Affairs (VA). VA renovation loans are designed to help eligible borrowers improve their homes.
VA Renovation Loans
According to the VA, a VA loan for alteration or repair is a supplemental loan that can be secured in conjunction with a new VA purchase loan or extended to eligible veterans after a home purchase. This means that a renovation loan can be used when purchasing a home that is in need of rehabilitation. Alternately, it can be used by qualifying homeowners to finance repairs or improvements at their home or to fund rehabilitation efforts while also refinancing an existing loan on the property being renovated.
The residential property must be owned and occupied by an eligible veteran and be secured with a VA loan. There are also some restrictions on the way the funds can be used. Basically, the renovations must be intended to protect or improve the basic utility and livability of the property, so the funds have to be used for improvement, maintenance, replacement, or the acquisition of real property like appliances or fixtures.
Using a VA Renovation Loan
A VA renovation loan is designed to help homeowners make their homes more livable. It can be used to make alterations, improvements, and upgrades that make the house more useful or efficient, but not every improvement meets that test. While building additional rooms, installing a patio, or putting in a swimming pool might be desirable, these improvements would not be considered an acceptable use of a renovation loan. How do you know if a VA renovation loan is a good match for your renovation plans? Review the following list of allowable repairs:
- Repair the foundation
- Repair or replace the roof
- Install, repair, or replace guttering and downspouts
- Install, repair, or replace windows, doors, and siding
- Install, repair, or improve weatherization materials
- Install insulation in ceiling and walls
- Remove asbestos
- Repair, replace, or recondition electrical
- Repair, replace, or recondition plumbing
- Repair or replace HVAC and other mechanical systems
- Repair or replace the well and septic system
- Install or replace subflooring and flooring like wood, tile, and carpet
- Renovate a kitchen, including the cabinets and appliances
- Secure lead paint abatement services
- Paint interior and exterior surfaces
- Repair termite damage and secure termite treatment
- Repair or remove an in-ground swimming pool
- Install or repair walkways, driveways, and fencing
The Benefits of VA Renovation Loans
What makes VA renovation loans a smart choice? This type of loan offers significant benefits:
Convenience
Whether you are purchasing a home or refinancing your current residence, adding a VA renovation loan to the deal is convenient. For starters, you’ll only need to complete one application. Plus, there’s no waiting. If you bundle a VA purchase loan with a renovation loan, you’ll receive the renovation funding at the time of your purchase. Finally, rolling the renovation loan into your mortgage means that you’ll only have one monthly payment.
Affordability
Opting for a VA renovation loan not only means that you will only need to make one mortgage payment each month but also that the payment will be more affordable. These loans can be financed over a 30-year term, and lengthy loan terms result in lower monthly payments.
Savings
Because the loan is rolled into your mortgage, it is one loan with one low rate and one monthly payment. Why choose a second loan that would likely come with a higher rate?
Flexibility
While the VA does place limits on how its renovation loans can be used, this form of financing can be used to fund a wide range of practical repairs and improvements. You can address structural issues, update mechanical systems, and reduce your energy bills by taking steps to make your home more efficient. You can even utilize up to 25 percent of the loan to purchase non-fixtures like appliances as long as they are clearly related to the purpose of the loan.
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With VA renovation loans, incredible transformations are possible. If you are interested in learning more about this form of financing or other loan options, contact PrimeLending: Manhattan, Kansas today to arrange a consultation. Every year, we help thousands of veterans and active-duty members of the military buy or refinance their homes through the VA home loan program. With our assistance, you can take advantage of the many benefits of a VA loan while saving money due to our lack of lender fees. We offer 100% financing with competitive interest rates – no down payment or PMI required! To learn more, please give us a call at 785-560-3011 or contact us online. We would be happy to help you explore the types of VA loans available. It’s our turn to serve you!
