VA Loan Properties
If you’re planning to use a VA home loan to finance your home purchase, it’s best to know which types of properties are acceptable use properties. What does this mean? Acceptable use properties are types of properties that the VA has approved for VA home loan financing.
Remember: the VA Loan program is meant to help qualified service members and veterans and their families find homes. But these homes must be safe, sound and sanitary, and the owners should live in them full-time.
If your dream is to flip a house or buy a fixer-upper to make your own, the VA Loan program is not going to help you do that. A different type of financing may be best for you. The most widely accepted VA Loan property is a single-family home in good condition. This type of property is the most commonly purchased property for VA homebuyers.
VA Loan holders can also buy a condo, but only if it is in a VA-approved development. Condominium developments must be VA-approved, and your lender and Realtor can help you determine which properties are approved. If you have your heart set on a condo unit and the development is not approved by the VA, you may be able to get help from your lender in asking the VA to approve the development. This isn’t a quick fix, though; the approval process can take weeks or months.
VA homebuyers can build new construction homes, but these homebuyers may find difficulties in working with lenders that will fund new construction. In most cases, it is easier to use a construction loan from a builder, and then opt to refinance that loan into a VA Loan. Things get tricky here; ask your lender and home loan team for expert advice.
The VA also approves manufactured homes for purchase, along with modular homes and multi-unit properties, but all come with their own obstacles. Manufactured homes aren’t always financed by lenders as they’re seen as unreliable investments. Modular homes sometimes require the homebuyer to use a construction loan, as discussed above. And finally, multi-unit properties are approved, but only up to four one-family units in a multi-unit property. The homebuyer must live in one of the units, as well.
Having an understanding of which properties are approved by the VA is a great first step in the homebuying process. Knowing what you can finance with your VA home loan sets you up for homebuying success!
Learn More About Applying For A VA Loan