Carlos Scarpero- Dayton and Cincinnati Ohio Mortgage Broker

Frequently Asked Questions About VA Renovation Loans

Here are some frequently asked questions about VA renovation loans.

Be sure to also see my blog post, The Complete Guide To VA Renovation Loans.

Does the VA have a renovation loan program?

Yes, the VA has a renovation program that allows you to roll in renovations into the mortgage loan

What is the VA renovation loan program?

The VA renovation loan program is a program that allows eligible veterans to combine a purchase or refinance with eligible home improvements into a single VA backed mortgage loan.

Does the home being purchased with a VA reno loan need to meet the VA minimum property requirements?

One of the great benefits of the VA reno program is that the home being purchased does not need to meet VA minimum property requirements at the time of sale. However, you will need to get it reinspected after the repairs are completed to ensure that all of the safety deficiencies have been resolved.

Where does the VA Handbook offer guidance for the VA renovation loan?

Information about the VA renovation loan is in Chapter 7, Section 4 of the VA Handbook.

Can a VA renovation loan be used to purchase a manufactured home?

Yes, you can buy a manufactured home with the VA renovation program.

Can a VA renovation loan be used to purchase a condo?

Yes, a VA renovation loan can be used to purchase a condo that is VA approved.

Can a VA renovation loan be used to purchase a mixed-use property?

The VA guidelines allow the VA renovation loan to be used to purchase a mixed-use property. However, it can be extremely difficult to find a lender that would allow this.

Does the VA rehab loan have a higher interest rate?

Lenders set their own guidelines for interest rates. Most lenders charge more for the VA rehab loan than for a regular VA home loan.

Does the VA renovation loan have higher closing costs?

Yes, some closing costs associated with the VA renovation loan are higher than those on a regular VA loan. However, the renovation-specific closing costs can be financed as part of the renovation budget. Veterans should consider the added costs when considering the VA renovation program option.

Is A HUD Inspector required with a VA renovation loan?

A HUD Inspector, also known as a 203k inspector, is required if the renovation budget is over $50,000.

What types of repairs are allowed with a VA renovation loan?

Many different types of repairs are allowed on the VA renovation loan. Some of the allowable repairs include fixing health and safety issues, connecting sewage and plumbing, replacing AC systems, mold remediation, installing new roofing, making energy conservation improvements, making the home disability accessible, removing lead-based paint, and removing asbestos.

What types of repairs are not allowed with a VA renovation loan?

Each lender has different rules regarding non allowable repairs. Most won’t allow structural work, luxury items, landscaping or moving a home to a different site.

How long do I have to get the repairs done with a VA reno loan?

Each VA reno lender has their own rules, but most require all repairs to be done within 4 to 6 months,

Can occupancy be delayed when using a VA rehab loan?

When using a VA rehab loan, normal occupancy rules apply, which is 60 days after closing. Occupancy can also be delayed upon request in certain cases like PCSing.

How does the appraisal work with a VA renovation loan?

When the VA appraisal is ordered, the purchase contract is submitted along with the repair estimate. The appraiser will determine the projected after repaired property value for the appraisal.

Can I do the work myself with a VA renovation loan?

The VA guidelines do not address self help. However, nearly all VA lenders will require you to use a VA approved contractor when using the VA renovation loan.

Take the 30 second mortgage quiz to see if you qualify

Can you use a VA loan to buy a home and fix it up?

Yes, you can use a VA loan to buy a home and fix it up but only if you use the VA renovation program. The regular VA loan has minimum property requirements that need to be met.

Can a VA renovation loan be done as a refinance?

Yes, a VA renovation loan can be done as a refinance.

Which loan is best for house renovaton?

If you are VA eligible, the VA renovation program will have the lowest closing costs. Other mortgage programs to consider are the FHA 203k program and Fannie Mae Homestyle.

Will the VA pay for a bathroom remodel?

Yes, bathroom remodels are an eligible repair on the VA renovation program.

Will the VA pay for a kitchen remodel?

Yes, kitchen remodels are an eligible repair on the VA renovation program.

Will the VA pay for a roof replacement?

Take the 30 second mortgage quiz to see if you qualify

Yes, roof replacements are acceptable repairs on the VA renovation program.

What are some drawbacks of VA renovation loans?

The drawbacks of VA renovation loans are: the loan could take longer to close, not every repair is eligible and repair limits may apply

What credit score do you need to get a VA renovation loan?

There is no minimum credit score to get a VA renovation loan. However, it is very hard to get approved if your credit score is below 580.

Can someone with bad credit get a VA renovation loan

It is possible to get a VA renovation loan with bad credit. However, very few lenders will approve someone with a credit score below 580.

How much is the renovation limit on a VA renovation loan?

VA guidelines do not state a specific limit for the renovations. Each lender sets their own limits and most have repair limit set between $50,000 and $100,000.

What's the difference between VA renovation, 203k and Homestyle renovation?

VA renovation is the renovation program from the VA. 203k is FHA’s renovation program and Homestyle is Fannie Mae’s renovation program. Each have their pros and cons but they all work in a similar way. All of these programs allow you to roll renovation costs into your mortgage loan.

Is the VA renovation program suspended?

The VA renovation program was suspended during Covid due to appraisal issues. However, the program is now active and fully operational.

Where is the best place to find a VA renovation lender?

The best place to find a VA renovation lender is through a mortgage broker.

Does Veterans United offer the VA renovation loan program?

As of 2023, Veterans United does not offer the VA renovation program.

Does USAA offer the VA renovation loan program?

As of 2023, USAA does not offer the VA renovation loan program.

Take the 30 second mortgage quiz to see if you qualify

Does Rocket Mortgage offer the VA renovation loan program?

As of 2023 Rocket Mortgage does not offer the VA renovation loan program.

Does Navy Fed offer the VA renovation loan program?

At this time, Navy Fed does not offer the VA renovation loan program.

What's the difference between a VA renovation, VA reno and VA rehab loan?

VA renovation, VA reno and VA rehab loans are all the exact same program.

Can a VA renovation loan be used to buy a foreclosure?

A VA renovation loan can be used to buy a foreclosure if the terms of auction allow it.

Can a VA renovation loan be used to buy a HUD home?

Yes HUD foreclosed homes can be purchased under the VA renovation loan program.

Can a VA renovation loan be used to purchase a flip house?

No, flip houses cannot be purchased on the VA renovation loan program. All VA loans require the veteran to intend to occupy the home for at least a year.

Can a VA renovation loan be used to purchase a multi family home?

Yes, you can buy a multi family home (up to 4 units) on the VA renovation loan program as long as you occupy at least one of the units. You can even use the rental income toward qualification.

Can a VA renovation loan be used to buy a rental property?

The VA loan program is only for owner occupied properties. The only way to buy a rental home on the VA renovation program is by purchasing a multi unit property and living in at least one of the units.

Can a Va renovation loan be refinanced into a regular VA loan?

Yes, VA renovation loans have the same features as any other VA mortgage program. You could do a cashout refinance or a IRRRL streamline refinance at a later date if you choose to.

Is a VA renovation loan assumable?

Yes, VA renovation loans have the same features as any other VA backed mortgage. Per VA guidelines, these mortgages are all assumable. 

Does the VA renovation loan allow for deferred payment during the renovation period?

The VA renovation loan does not allow for deferred payment during the renovation period. If you are unable to live in the property during renovation, you may have to make two housing payments.

If a disabled veteran wants to use the VA renovation loan to improve accessibility, is this possible on the VA renovation program?

Yes, a disabled veteran can use the VA renovation program to make safety improvements to improve accessibility.

When will the contractor receive payment?

While the VA does not specify when the contractor is to receive payment, most lenders do not allow for an initial materials draw. The contractor will have to complete at least some of the work and submit a draw request to receive payment. After the work is completed, an inspection will be done for the contractor to be eleigible to receive their final payment.

What states are you authorized to lend in?

I can provide VA renovation mortgage financing in all states where I am licensed. I’m currently licensed in Ohio, Kentucky, Indiana, Florida, Texas, Alabama, Virginia, Tennessee, Arizona, Michigan, IllinoisMissouri, California, Georgia, Oregon, Pennsylvania and Washington. Additionally, through our corporate partner program, I am able to leverage our home office and offer mortgage financing in over 30 additional states.

Take the 30 second mortgage quiz to see if you qualify

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