When you choose to purchase with a VA loan, you are setting yourself up to have an advantage over all other home buyers. We want to cover VA loans extensively here on our site because unfortunately there are still many military members missing out on this awesome benefit. This is most true for recent veterans, who are often unaware of the program. This is due to a number of reasons including lack of information, shady lender practices, and logistical requirements for the loan. We want to make sure that the veterans we serve know all the ins and outs of the program. One of the more common confusions regarding the VA loan is “what types of property can it be used to buy?” We are going to run through the various options so you can be ready to buy when your dream property comes up.
Single Family Homes-Buy!
This is the most common type of purchase for eligible veterans. If you are buying a single family home that is going to be your primary residence, you are good to go with the VA loan. This includes condos and townhouses (they have to be approved). One thing you will want to keep in mind is that the home you are purchasing needs to be in move-in-ready condition. Since the U.S. government backs the loan they want to ensure that you are buying a livable property. They don’t want to finance your fixer-upper project.
Build A New Home-Maybe?
There are a small handful of lenders who are willing to take a flyer on a VA loan to build a new home, but they are few and far between. This comes in as a maybe because you can find a VA loan to buy a new home, but you will have to do extensive research. Building a home always comes with unexpected costs and some lenders aren’t willing to take that risk by approving a VA loan for new construction.
Manufactured homes are good to go with the VA loan. You will have to remember that for a new manufactured home you will need a lot to drop it on. Manufactured homes can be a more affordable option to traditional homes and can be a great option for veterans. However, there are divergent opinions about whether or not manufactured homes grow in value over time. If you are buying a manufactured home just as a residence, not an investment, feel free to proceed.
You can purchase up to a quad-plex property with a VA loan, if you are going to be living in one of the units. Be careful here though, you need to continue to live in that unit while it is financed through a VA loan. This can be a great way to get into the investment property business as a veteran. Since mortgages for non-primary residence rental properties are about a percentage point higher, the VA loan is a smoking deal.
Investment Property-Can’t Buy.
You cannot use your VA loan to purchase an investment property that you do not occupy. If you want to get into the investment property market, use your VA loan to purchase a multi family unit and live in one of the units (as described above).
If you have your sights set on a piece of empty pasture, the VA loan won’t be for you. If you want to live on a farm find one that has a farmhouse already on it and you can make your rural dreams come true. There is peace that comes from getting away from it all, and you can have it via the VA loan.
The VA loan is a very flexible product and we hope that it will help you find your dream home, whatever that looks like for you.
Have you purchased a home with a VA loan recently? What was your experience? Any suggestions for your fellow readers?