VA Renovation Loans.You Served, You Earned It!

The Zero-Down Payment Renovation Mortgage for our Veterans and Current Military Personnel

With Millennial Home Loans quick online loan application, determining if you qualify for an VA Renovation Loan and for how much, has never been easier.

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VA Renovation Loans Program Guidelines

Loan Purpose

  • Purchase
  • Refinance: Cash out

Credit Profile

  • 620 minimum middle credit score for all borrowers on the loan
    • 620-659: A minimum of 2 qualifying credit scores are required
    • 660+: A minimum of 1 qualifying credit score
  • No foreclosure or short sale within two years of contract ratification date
  • No Chapter 7 bankruptcy discharge within one year of contract ratification date

Amount of Repairs

  • Total renovation cost includes required contingency and reinspection fees
  • If renovation costs exceed $50,000, a HUD Consultant will be required
  • There is no minimum renovation budget

Construction Time

  • No more than four (4) months from closing

Contingency Escrow Reserve

  • 15% of the Contractor proposal

Draws

  • Up to 3 draws allowed
  • Draw amount will be based on inspections and percentage of completion

Draw and Title Update Costs

  • Up to 3 inspections at $200 per inspection
  • 1 title update at $100
  • 1 Final Lien Waiver provided by the General Contractor

General Contractors

  • Only 1 General Contractor (“GC”) allowed
  • GC must be registered with the VA. See VA Builder Registration for a list of VA registered builders
  • GC can't be related to the borrower(s) or an employee/employer of the borrowers
  • GC must be insured, licensed, and bonded
  • GC must provide a detailed contractor estimate itemizing all repairs that are to be completed with costs broken down by material and labor and if applicable permit costs

Loan Amount

  • With zero down, the maximum loan amount is the standard conforming loan limit, which is currently $647,200, or VA High Balance loan limit
  • Down payment required when the purchase price exceeds the standard conforming or High Balance loan limit. Down payment is 25% of the amount exceeding the standard conforming or High Balance loan limit
    • Example: If the VA loan limit for a county is $647,200, this means that if the Veteran has full entitlement, VA will provide a 25% guaranty on the loan up to $647,200. If a Veteran has a contract to purchase a home in the amount of $550,000, the lender may require the Veteran to make a down payment of 25 percent of the $65,650 ($550,000 - $647,200) difference, which would be $16,412, providing the lender a full 25% guaranty.

Funding Fee

  • Funding Fee is waived for Veterans receiving VA related disability income and surviving spouses of Veterans who haven’t remarried
  • Funding Fee Calculations are as follows:
Purchase:
Type of VeteranDown Payment% for First Time Use% for Subsequent Use
Active Duty, Reserve, National Guard,None2.30%3.60%
5% or more but Less than 10%1.65%1.65%
10% or more1.40%1.40%

Ratios

  • As determined by Automated Underwriting System or AUS with DTI ratios up to 65%. Requires a Desktop Underwriter “Approved/Eligible” or Loan Prospector “Accept” findings
  • Manual Underwrite acceptable with DTI ratios up to 41%

Property Type

  • Owner-occupied 1- or 2-unit properties
  • Existing attached and detached single-family residences
  • PUD's (i.e. Townhomes)
  • Log cabin homes provided Appraisal Report lists other comparable log cabin homes that have recently sold in the area
  • Condominium units are not permitted

Occupancy

  • Owner occupied only
  • All borrowers on the loan must have ownership in and occupy the property
  • Non-married Partners not permitted on the loan request
  • No co-signers permitted

Property Valuation

  • The appraisal order can't be processed without (1) the Builder/Contractor VA ID number and (2) contractor proposal being obtained
  • Appraiser to provide an "as-is value" and "after-completed value"
  • Value must be up to 100% of the as-is value plus renovation costs
  • Final inspection must be completed by a VA Appraiser once property is 100% complete

Documentation

  • All loans must be fully documented per Agency Guidelines
  • For Self Employed borrowers, in addition to Agency Guidelines, two years of the tax returns (personal and business) along with a year-to-date profit and loss (unaudited)

Down Payment/Closing Costs

  • 0% down payment required
  • Seller contribution toward buyers closing costs and escrows up to 6% of the purchase price

Terms

  • Amortization period: 15, 20, 25, 30-year fixed rate