Veterans now have access to a new VA renovation loan to refurbish or remodel their homes. This loan program is available for new home purchases as well as for remodeling homes currently owned by the veteran. It is estimated that over 50% of homes nationally are 40 years or older, and in the current housing market many homes are in need of updating, addressing deferred maintenance, or improving the energy efficiency of homes to lower utility costs.
VA loan benefits include the following unique advantages: a. up to 100% financing, b. no mortgage insurance, c. up to $ 35,000 in renovation funds escrowed, d. all renovations must be completed within 60 days of closing, e. you can close on a purchase or refinance in the “as is” condition, f. you can borrow against the future value of the home after renovations.
There are many items on a renovation that can be funded by renovation funds. Here are just a few of the eligible renovation uses: a. new roof, b. replace air or heating systems, c. installing or repairing fencing, sidewalks, driveways, d. installing new refrigerator, cooktop, microwave, dishwasher, washer or dryer, e. repairing or removing an in ground swimming pool, f. creating accessibility for people with disabilities, g. installing, replacing or repairing exterior decks, patios or porches, h. repairing or replacing well or septic systems or connecting to public water and sewage systems and more.
There are also some ineligible renovations. They include: a. reconstructing a structure that has been or will be demolished, b. repairing an existing foundation, c. landscaping, d. recreational improvements such as adding a pool or hot tub, spa or sauna, e. making structural improvements such as an addition or alteration. In the event you need these items, we do have some loan programs available to address these needs via a unique FHA renovation loan.
All homes in Galveston, Texas are eligible. The veteran just has to have their VA benefits, which we can assist you in obtaining. There are linmits on maximum loan to value on these loans- for purchases it is 100%, and for refinances it is 90%. For more information on loan limits you can review the information on the VA website here: https://benefits.va.gov/benefits/ Owner occupied properties are eligible for this program- if you have non owner occupied properties, contact us for alternative financing programs to address those needs. Manufactured homes are not eligible under this program. The minimum loan amount on this loan program is $ 100,000 and a credit score of at least 620 is needed. Improvements must be done by an approved contractor, the owner cannot make the improvements themselves under this VA loan program. If you have this need we do have other renovation programs to address this.
Very few mortgage companies have this program in house. You want to insure you go with a lender who can originate, underwrite, close and fund all construction draws in house. Those that try to go through a brokered source instead of a full direct lender will become very frustrated with time delays and lack of control. It is also important to go with a mortgage professional that specializes in VA loans. Joy Bates, Branch manager and Senior Mortgage Banker is a certified VA loan specialist and loves serving our veterans.