Acceptable VA Loan Uses

Let’s take a closer look at some of the acceptable and unacceptable uses of VA loans.

Acceptable uses include:

•Single-family home -- Single-family homes are a great option for a multitude of buyers, and they’re the most commonly purchased property of VA loan recipients.

•Condominium -- Condo developments need to be approved by the VA. 

•New construction -- The VA also allows for a $0 down loan to build a new home, but a more common approach is to obtain a construction loan from a builder and then refinance the short-term loan into the VA program.

•Manufactured home -- the VA does allow for manufactured homes, but it’s difficult to find VA lenders willing to finance these properties. We DO offer this type of financing at American Financial Network, Inc. 

•Modular home -- These are not the same as a manufactured, or mobile, home. Mobile homes are built to national HUD standards and have a HUD identification tag. Buying an existing modular home is treated the same as any other stick-built home.

•Multi-unit property -- Buyers can purchase up to four one-family residential units in a multiunit property. At least one of those units must be used as the buyer’s primary residence. 

Unacceptable uses include:

•Investment property -- Veterans cannot use VA financing to purchase a home solely as an investment property. 

•Business loan -- VA loans can’t be used to purchase a storefront, office space or any other non-residential properties.

•Unimproved land -- Veterans can’t use VA loans to purchase bare land or farm ground that does not contain the borrower’s primary home. You also can’t buy land with the intent of someday putting a house on it.

•Abroad -- VA loans can only be used for properties in the United States and its territories, which include American Samoa, Guam, the Northern Mariana Islands, Puerto Rico and the U.S. Virgin Islands.

It’s important to know that lenders are free to add their own property restrictions to this list. For example, many VA lenders won’t offer financing for manufactured homes. Others will decline to lend on properties like a working farm or a geodesic dome. Acceptance or denial from one lender does not necessarily translate into acceptance or denial from all lenders.

VA Adaptive Housing Grants

Disabled veterans may have distinct needs when it comes to housing. The VA has two grant programs that can help veterans with certain permanent and total service-connected disabilities build or modify a home to best meet their needs.

One is the Specially Adapted Housing (SAH) grant, and the other is the Special Housing Adaptation (SHA) grant. The maximum dollar amount available for these grants is set by law but can change annually depending on construction costs and other factors. Veterans interested in exploring the SAH and SHA grants can apply online through the VA's eBenefits portal or contact their nearest VA regional office (1-800-827-1000) for more information.