What Can I Buy With a VA Loan?

VA loans come with federal backing, low rates, and no down payment. They’re a great benefit for military service members and veterans. So, what can you buy with a VA loan? Does your dream home make the list? Or will you need to consider a different type of mortgage to fund it? Let’s review.

What You Can Buy With A VA Loan

You can use a VA loan to purchase a typical single-family home, as well as any of the following:

• Fixer-Uppers: Whether the home needs massive repairs or just some energy-efficient additions, you can bundle the construction costs with the rest of the mortgage.
• Multi-Units: You can use a VA loan to purchase a multi-plex for your family or partial investment purposes. You’ll be required to live in one of the units.
• Condo: You can purchase a condominium from a building project that’s already been approved by the VA.
• New Construction: You can purchase new construction with a VA loan if it’s a VA-approved project. Of note, there are strict requirements, and lenders may be hesitant to accept a buyer with no money down.
• Manufactured Home: Mobile homes are more difficult to finance because they tend to depreciate, but modular or prefabricated homes appreciate and are easier to finance.
• Foreign Properties: Believe it or not, you can use a VA loan to purchase a home overseas, but it must be in Puerto Rico, American Samoa, the U.S. Virgin Islands, or the Northern Mariana Islands.

What Can’t You Buy

With a VA loan, it’s exceptionally easy to achieve the American dream of owning the roof over your head. However, there are a few types of properties that don’t qualify:

• Properties Outside U.S. Territory: Even if you find the perfect home in the country you’re currently stationed in for the next five years, the VA loan can’t fund the purchase.
• Vacant Land: You may want to purchase vacant land to put a mobile home on at your own expense or build a home in the future, but a VA loan won’t pay for this.
• Investment Properties: VA loan homes must be owner-occupied, so they can’t be used to purchased investment properties or second homes.
• Farms: Homesteading may be one of your greatest aspirations, but it’s one that a USDA loan might be better suited for (unless there’s already a residence that will be owner-occupied).
• Co-ops: The VA loan stopped backing financing for co-op condos in 2011 and shows no signs of reversing the policy.

How To Get Started With A VA Loan

The first step is requesting your Certificate of Eligibility (COE) from the VA. It confirms to lenders that the VA will back the loan. There are eligibility requirements, such as service periods and discharge reasons. You can then request a quote from National Home Loans. Knowing your rates and how much house you qualify for will give you a leg up in the competitive housing market.