Can You Buy Land With a VA Loan?
It is possible to purchase land with a VA loan, but you have to do it at the same time as building a new house. Even if you want to build a house later, you cannot use a VA loan to buy land on its own.
How to Buy Land With a VA Loan
Though it sounds complicated, the main idea is this: If you’re just buying land, a VA loan won’t work. Purchasing land and constructing on it immediately? The VA will approve it.
If you want to use the benefits of your VA loan to purchase land, you usually have three options:
- Finance the building of your intended house and the land you plan to put it on at the same time with a VA loan.
- Buy land using some other means of financing. Next, utilize the proceeds from your VA loan to build your house.
- Purchase land and build your house with additional funding, usually a construction loan with a short term. Refinance the construction loan into a VA loan after everything is finalized.
You are able to use a VA loan to build on land that you already own or that you inherited. Additionally, if you originally bought the land with a different kind of loan, you might be eligible to refinance after your house is built.
Does Veterans United do land loans?
Like the majority of VA loan providers, Veterans United does not provide loans for new construction or land. We do, however, frequently assist Veterans who are interested in these types of loans. After closing, veterans who hire a builder or local lender to construct their home can frequently refinance it into a VA loan.
Rules for Buying Land & Constructing a Property
Similar to other VA loans, there are specific requirements that must be fulfilled if you intend to use your benefits to purchase land and build a property.
Here are the big ones:
- There can be no more than four units in the property you build. Every unit needs its own connections for gas, electricity, water, and sewage, and you have to reside in one of the units as your primary home.
- The property must be affixed to a permanent foundation.
- The property needs to adhere to all local and federal building codes as well as the VA’s minimum property requirements.
- The property cannot be situated near a railroad track, airstrip, highway, or other noisy area that could flood. ).
- The property cannot be close to a hazardous material facility, dump, or landfill.
- The terrain cannot be susceptible to earthquakes, landslides, or other geological instability.
Naturally, in order to be qualified, you’ll also need a current Certificate of Eligibility, and your builder needs to have a current VA ID. Find out more here about the specifics of VA construction loans.
VA Loans for Land and Construction Aren’t Common
Although the VA permits it in theory, most lenders do not provide VA loans for building and land acquisition. These loans are typically riskier, and if you find a lender who will give one, there might be additional requirements for a down payment to help with the risk.
This can be avoided by funding the purchase of the land and the construction of your home with a construction loan or other financing option, then refinancing into a VA loan after the home is completed. In such a case, you would then qualify for a VA loan with a standard zero-down payment.
Ultimately, yes, you can buy land with a VA loan, but there are certain tight requirements. Additionally, it might not be the simplest or most economical path to becoming a homeowner.
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FAQ
Can you use VA loans to buy land?
As an alternative to purchasing a pre-built home, the Department of Veterans Affairs permits borrowers to use a VA home loan to purchase land and build a new home on a plot of property. There are limitations on how the money can be distributed.
What property Cannot be financed with a VA loan?
Veterans are not eligible to use VA loans to buy just farmland or land that isn’t their primary residence.
What can you use VA loan for?
VA helps Veterans, Servicemembers, and eligible surviving spouses become homeowners. We offer a home loan guarantee benefit and other housing-related programs as part of our mission to serve you, to assist you in purchasing, building, maintaining, or modifying a home for your own personal use.
Can you buy an RV with a VA loan?
This implies that the property needs a permanent foundation, which regrettably means that boats and RVs cannot be bought with a VA loan. Boats and RVs are prohibited property types for VA financing because they don’t meet the VA’s minimum square footage requirement.
Read More :
https://www.veteransunited.com/valoans/va-land-loans/
https://www.forbes.com/advisor/mortgages/can-you-buy-land-with-a-va-loan/