VA Renovation Loan Helps Veterans Buy a Fixer Upper

Erin Ward
Erin Ward
Published on July 24, 2018


Military veteran buyers have access to possibly one of the best loans in the US. The VA Renovation Loan provides very affordable financing and typically, and it is a no money down purchase.

Just imagine this: A Veteran finds a home in the perfect neighborhood within their desired school district. The home has good bones, but the roof needs replacing and the kitchen is outdated. This is bad news for VA Loan approval. A bad roof, missing HVAC, or peeling paint will cause issues on the VA appraisal. In this case, the Veteran buyer would need to look for another house. This scenario is a prime example of how a VA Renovation Loan could save the day.

VA Renovation Loan Benefits

You heard right! There is a VA loan that allows for a qualifying Veteran, service member, or qualified surviving spouse to finance home improvements. Normally, a Real Estate Agent would steer clear of fixer upper homes for Veteran buyers because of the VA appraisal requirements. However, don’t blame the agent because there aren’t many VA Renovation Loan lenders out there. Luckily, OVM Financial does offer this beneficial rehab loan product.

If you think about it, most of the time it is hard for a VA buyer to fix up their new home. A traditional VA loan could finance 100% of the purchase price. Borrowing 100% of the price means there is probably not an option to obtain a home equity line for improvements. Then, the only other option may be to pay out of pocket or get a smaller, unsecured loan at a higher interest rate. Otherwise, the homeowners will just have to wait until they can afford to pay for the home improvements. That is why a VA renovation loan is such a great option.

Reasons To Choose A VA Purchase Rehab Loan

You can:

  • Keep funds in the bank
  • Buy the home you desire and include renovations
  • Put your mark on the home right away
  • Get a good deal on the home buying it as is
  • Potentially benefit from a no-down-payment option

VA Renovation Guidelines

This has to be sounding pretty good for VA borrowers, Realtors®, and even the sellers. So, you have to be wondering about the details. Is it hard to get? Not really. The underwriting guidelines are very similar to traditional VA requirements. Here are some of the primary details:

  • Primary residence only
  • 100% Loan to Value using “as completed value”
  • 640 Minimum credit score
  • Up to approximately $29,500 in repairs or renovations
  • Includes minor and non-structural repairs
  • Accessibility upgrades allowed (ramps, rails, etc.)
  • 1-2 Unit Properties
  • Purchase or Refinance
  • Cosmetic repairs are allowed
  • NO Consultant required

Fixer Upper Home Solution for Veterans

If you are a Veteran buyer or a Realtor®, just think of all of the homes you passed by that could have been perfect with a little work! Now, with being able to finance home improvements into one VA loan using the “subject to” or “as completed value,” it opens up many possibilities.

With that said, when touring homes, make sure to check out the ones that need some TLC too.

VA Appraisal Required Repairs Causing a Problem?

You may have caught this already and if you are a Realtor®, but the next time there are VA appraisal required repairs that the seller will not fix, contact your OVM Financial loan officer. Our VA renovation loan allows the purchase to close and the repairs to be completed after closing. The seller is happy, the buyer is able to get the desired home with the required repairs completed and maybe even some extra improvements. Plus, the Realtor® is able to find a solution for all parties.

For more information reach out to our preferred OVM Financial Partners:

Chip Simkins III

Chairman/Mortgage Loan Originator

Phone: 757-409-9079

Fax: 800-405-8160

Email: [email protected]

NMLS#202695, #MLO-5577VA

816 Greenbrier Circle, Suite 100 – Chesapeake, VA 23320

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Betty Tharpe

Mortgage Loan Originator

Phone: 757-717-1818

Fax: 888-316-9699

Email: [email protected]

NMLS#1673746, #MLO-35543VA

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