VA Renovation Loans: A Guide for Veterans and Families
Thinking about renovating? Get access to special benefits designed to help Veterans meet their homeownership goals with a VA renovation loan. Here’s what you need to know.
What Is a VA Renovation Loan?
Purchase or refinance and renovate with the same loan
VA renovation loans include both the purchase or refinance of a home plus the cost of upgrades, so you don't have to take out a second loan.
Available for a wide variety of projects
This program can be used for a wide range of home improvements, including kitchen and bathroom upgrades, structural repairs, energy-efficient updates, and more.
Works like a construction loan
Similar to a construction loan, funds for a VA renovation loan are disbursed in phases that are tied to project milestones to make sure all upgrades are completed as planned.
What Can a VA Renovation Loan Be Used For
Upgrades that affect the home’s safety or livability
VA renovation loans can only be used to make changes that improve the safety or livability of the home and generally don’t cover cosmetic or luxury upgrades.
Homes that don’t need major structural repairs
Additionally, this program only covers basic repairs and does not include structural renovations like foundation work, wall removal, and room additions. Repairs must be completed within 120 days of closing.
Multi-family homes with up to 4 units under certain conditions
You may also use a VA renovation loan to upgrade a multi-family residence if there are 4 or fewer total units and you occupy one of them as their main living space.
Pros
- Borrow up to the full as-completed home value
- No down payment
- No private mortgage insurance (PMI)
- Competitive interest rates
Cons
- Comes with a one-time funding fee
- Can only be used to renovate primary residences
- All work must be completed by VA-approved contractors
- Eligibility restricted to Veterans and spouses
Talk to our mortgage experts today about finding the right loan for you.
Alternatives a VA Renovation Loan
- Fewer eligibility restrictions than VA renovation loans
- Requires a down payment
- Can be used for primary residences, second homes, or investment properties
- Can be used for structural and/or cosmetic upgrades
- Flexible credit score requirements
- Backed by the Federal Housing Administration
- Property must be the borrower’s primary residence
- Subject to FHA loan limits
- Uses the equity in an existing property as collateral for the new loan
- Offers a revolving line of credit to use as needed during the draw period
- Funds can be used for any purpose, not just renovations
- Closing costs may apply
How Do I Know If a VA Renovation Loan Is Right for Me?
You haven’t saved money for a large down payment
Since the VA renovation loan doesn't require a traditional down payment, it can be a great option for borrowers who are looking to buy a house that needs upgrades without money down.
You want to stay in your home while renovating
If you need to make improvements to your existing home, this program can help you finance the renovation costs without having to leave your property.
The repairs will not exceed the home’s after-renovation value
A VA renovation loan lets borrowers finance repairs up to the estimated finished value of the home. You won't be able to use it for upgrades that cost more than what the property will be worth after completion.
When Is the Best Time to Take Out a VA Renovation Loan?
The best time to take out a VA renovation loan is when you want to buy or refinance a home that needs upgrades and you have your full entitlement.
It may also be a good time to use this program when you need to make significant repairs to a home you already own to maintain its livability. For example, if your home flooded and you need mold remediation to continue living there, a VA renovation loan could be an ideal fit.
Get In Touch With A Loan Officer Today
FAQ
What kinds of upgrades can be financed with a VA renovation loan?
How does the home appraisal process work?
What happens if the finished renovations are under budget?
Can I include landscaping or outdoor improvements?
Ready to Go?
Apply Now
Have Questions?
Get Them Answered
Borrowing Is Better with NYFTY Lending
Find Your Loan Officer Today
Connect with a loan expert near you to get started.
