VA Loan Rules for Land Purchases

VA Loan Rules for Land Purchases

You can forget that a property when you look at the suburbs is maybe not the option that is only first-time house customer has with a VA mortgage loan. There are many solutions while the Department of Veterans Affairs has expected most of them with regards to buying home and selecting choices.

For instance, are you aware the VA will accept home loans for qualified borrowers who desire a home that is custom-built? A construction loan has rules and procedures particular to your dilemmas related to having an innovative new house built from scratch rather than a home that is existing.

The VA Lender’s Handbook has several things to say about the utilization of the VA loan advantage for land acquisitions. Based on Chapter Three for the handbook, “eligible purposes” for a VA mortgage are the capability to “purchase or build a residence, including a condominium or unit that is cooperative become owned and occupied because of the veteran being a home.” Some stipulations are included by the rules concerning exactly what can be bought:

  • The mortgage can sometimes include simultaneous purchase associated with land upon which the residence is found or will soon be situated;
  • Loans are often assured for the construction of a residence on land currently owned by the veteran (a percentage of this loan enable you to refinance a purchase cash home loan or sales agreement for the purchase regarding the land, at the mercy of reasonable value needs).

The VA will likely not enable the purchase of unimproved land using the intent to enhance it at some date that is future meaning the land purchase isn’t in combination with a construction loan. More →