What Kind of Home Qualifies for a VA Loan?
Since the VA loan program's inception in 1944, millions of our nation's Armed Forces veterans have been able to purchase or build a home with loans they might not have otherwise received. Although the Veteran's Administration does not actually lend money to veterans, it offers to a conventional lender a guarantee of repayment, much like the FHA loan guarantee. Because the lender is assured of repayment, VA-guaranteed mortgage guidelines are much more relaxed than those of a conventional loan.
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Minimum Property Requirements
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The VA calls these "MPRs," and they help the VA ensure that a property conforms to building codes, federal regulations and Department of Housing and Urban Development requirements.
Types of Homes
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Single-family dwellings, either new or previously occupied, qualify for VA-insured financing. A proposed or under-construction home may also qualify. To determine eligibility, the building plans and specifications will need to be inspected by either the VA or HUD. A condominium purchase must meet certain criteria and the entire project must be approved by the VA. A manufactured home may be eligible as long as it is affixed to a permanent foundation, taxed as real property and is compliant with all building and zoning codes.
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Ineligible Properties
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If a property is rundown it my not qualify for an appraisal unless the VA thinks it can be repaired to meet their minimum standards prior to closing.
Location Requirements
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The VA will not guarantee the loan for a property located in a flood zone or an area where flood insurance is not available. Areas susceptible to earthquakes or landslides may also disqualify a home for a VA-guaranteed mortgage.
Occupancy Requirements
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The VA requires any veteran who obtains a VA-guaranteed mortgage to certify that he or she will personally live in the home as a primary residence.
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