25 Feb What Can a VA Loan Be Used For?
What Projects You Can Use Your VA Home Loan For
The VA Loan basics
The VA Home Mortgage Program is administered through the Department of Veteran Affairs to give veterans and current service members alternative options, fitted for their circumstances, when buying a home. When the GI Bill (also known as the Servicemen’s Readjustment Act) was created in 1944, the VA Home Loan was born. While the VA only guarantees, or insures, the loans, this assurance helps alleviate a lot of risk for the private lenders who fund the program, and thus borrowers are able to get great terms.
What kind of properties can you buy or improve with a VA Loan?
There are a variety of ways borrowers can use their VA Home Loan. You can buy, improve, build, or refinance, your primary residence. In most cases, rental properties are not eligible and vacation residences are never eligible for the program. There are a number of condominium and townhouse communities that can be included in the program and almost all types of residential properties are accepted, even manufactured homes. For refinancing, there are a couple of VA-qualified options as well as options for making energy efficient upgrades.
Some of the usual types of projects used for the VA Loan program are:
- Purchase a permanent family residence
- Purchase a condo in a VA-qualified community
- Purchase a multi-unit property of up to four units, as long as you live in one of them
- Complete upgrades to improve the energy efficiency of a home
- Purchase a lot or a manufactured home
- Refinance a mortgage
- Upgrade or repair a primary home
How can you refinance with a VA Home Mortgage?
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There are two main options for refinancing with a VA Home Loan. With the Interest Rate Reduction Refinance Loan (IRRRL), also called the VA Streamline Loan, you can not only receive a lower interest rate, but you can also refinance either a VA Loan or a non-VA loan with this program, as long as you qualify. With the Cash-Out refinance program, you can refinance your mortgage and receive cash back.
What else do you need to know?
The best feature of the VA Home Mortgage program is the $0 down payment option. Service members, veterans, and their families are able to finance 100 percent of their home purchase, including any closing costs and the VA funding fees. Plus, there are no requirements for mortgage insurance.
Make sure you fully research this program before applying. Once you are ready to apply though, visit our qualified lender page to find someone in your area to talk to and get a quote.