The VA Renovation Loan brings together some of the most innovative and attractive features of several popular mortgage programs. It provides no money down financing that covers not only the current value of the property, but the cost of remodeling and repairs as well. This program is intended for minor updates and work done on the home, with no minimum or maximum renovation cost requirement. Program overlays and eligibility during the pandemic include:
- Conforming Loan Limits only
- If Refinance transaction, limited to 100% LTV
- Home must be habitable during renovation,
Because the Veteran Administration requires that a property meet minimum property standards in order to qualify for VA financing, it is not uncommon for deals to fall through during the inspection phase. The seller may not want to pay for all the repairs needed to ensure the home meets the VA’s high standards. With a VA Renovation Loan the buyers may be able to move forward with the purchase of a home they love, while borrowing the additional funds needed to fix the issues with the property, still with zero down payment. The Veterans Administration generally requires an annual fee of $100 per third party originator for each entity that sponsors their origination. AFR pays this fee on behalf of its brokers and correspondents on AFR-related VA loans!
VA Renovation Loan Basics
- Purchase and Refinance Options
- Maximum renovation cost of $100,000
- Used to finance minor remodeling and non-structural repairs
- Renovations greater than $50,000 require a 203(k) HUD Consultant
- Fully Amortizing Fixed Rate
- 10 year, 15 year, 20 year, 25 year, and 30 year term options
- One or Two Unit Homes
- Primary Residence Only