VA Home Improvement Loans

A question that seems to come up quite often is, “Can I use the VA loan to do home improvements?” Many people ask if they can take out a loan that is a little bit larger than what their house is worth to cover costs for upgrades or things that just need fixing. Well, the answer is yes! Many people are unaware that this is even a possibility. Veterans can use the VA Home Improvement Loan to improve an existing home.

This really is not a loan, but more of a guarantee. The VA puts a guarantee on the loan, protecting the lender, just in case the borrower defaults. The VA does not actually lend the money. The lender does this. Due to this guarantee, the lender is able to offer better rates.

Some of the benefits to this type of loan include no down payment, better interest rates, no prepayment penalties, and an easier qualification process. This process is very similar to that of a VA loan.

There are two types of upgrades that can be covered by the VA loan. The first are energy-efficient upgrades. For example, you could put in new heating and cooling systems to improve the energy efficiency of your home. Improving insulation in your house is also another way to do this. Some restrictions do apply though. You can only borrow up to $3,000 before you have to prove that these improvements are reducing your utility bills. If it is less than that, then you only need to provide the receipts of the improvements. You can, however, borrower up to $6,000 without having to have an appraisal on the house.

The VA Home Improvement Loan can also be used for other improvements, but you cannot borrow more than 90% of the home’s equity. This way you end up with cashback allowing you to proceed with the necessary upgrades to your home. You as the veteran then get to decide what you want to do with that money. You can get a new roof, fix your plumbing, or maybe add a garage to your house.

The advantage to this type of loan is that these improvements just increase the equity of your home. So make your that you talk to a lender that specializes in VA loans soon and don’t keep putting off the repairs that your home needs! If you are qualified, this type of loan can only improve that value of your house and make you happier to live in it!

3 thoughts on “VA Home Improvement Loans

  1. Hello
    I have a home that I purchased in 2003 (new). I never used my V.A. Loan.
    I went FHA. (Fixed)
    Can I still use my VA Loan to do upgrade/home additions?

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